Each week, Stockhead recaps ASX stocks that are “running hot” as deduced by the Relative Strength Index (RSI).

The RSI is a technical gauge which measures how trading momentum is affecting the price action.

A reading of 70 is seen as the level at which a company may have been overbought. If a stock has a reading of 30 or below, it could be undervalued.

Here’s the original Hot Money article, which provides a more detailed rundown of what the RSI does and how it’s used.

While there’s usually a pretty good reason if a given stock is running hot (or cold), investors are also on the lookout for opportunities where the price action has separated from fundamentals.

Running Hot

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, January 14:

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Few (if any) companies on the ASX had a better Christmas/New Years run than Global Lithium (ASX:GL1), which was trading at 63c on Monday, December 22 and closed on Friday at $1.545.

Prior to that, the stock had already risen strongly from a 2021 trading range below 30c, after flagging a $13.6m cap raise backed by Chinese company Contemporary Amperex Technology Co — the world’s largest EV battery producer.

This week the company announced two board hires — experienced lithium executive Ron Mitchell as an executive director and Greg Lilleyman, former COO of Fortescue, as a non-executive director.

GL1 stayed on top of the Running Hot list for a second straight week, this time with a 14-day RSI of 93.69.

Lithium and other battery metals stocks continue to hold their place as the dominant investment theme to start 2021.

In line with that trend, SA-based graphite player Quantum Graphite (ASX:QGL) maintained second spot, following its return ‘back from the dead‘ last month after a long period of suspension from the ASX.

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, January 14:

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BNPL-adjacent play Zebit Inc (ASX:ZBT) has been on a steady decline since early 2021, in line with falls of ~80% for a number of ASX BNPL players since the sector reached its post-COVID zenith in February last year.

The US-based company listed on the ASX in October 2020, with a vertically integrated online marketplace that also provided BNPL payment options for target customers in lower income demographics that may otherwise struggle to access traditional credit services.

However, from after raising $35m at $1.58 per share the stock has struggled for traction, and closed at just 24c on Friday following another sharp fall to end the week.