If you’ve been watching the recent price action in lithium stocks, this week’s edition of Hot Money may not come as a huge surprise.

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.

Click here for 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 look out 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, August 6:

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Code Company Price RSI MktCap$
RHI Red Hill Iron 4.25 94 $ 250,889,444
LKE Lake Resources 0.605 87 $ 617,709,463
LEL Lithenergy 0.685 85 $ 27,000,000
PNI Pinnacle Investment 15.21 85 $ 2,830,172,474
IOD Iodm Limited 0.305 83 $ 171,348,467
PLS Pilbara Min Ltd 2.07 83 $ 5,860,993,963
GLN Galan Lithium Ltd 1.185 83 $ 294,363,190
PSC Prospect Res Ltd 0.355 82 $ 139,986,090
ATP Atlas Pearls Ltd 0.027 81 $ 12,408,281
CHR Charger Metals 0.335 81 $ 9,920,000
DOR Doriemus PLC 0.29 81 $ 18,844,515
SWP Swoop Holdings Ltd 1.5375 80 $ 186,168,250
PDI Predictive Disc Ltd 0.175 80 $ 249,763,298
SMN Structural Monitoring 0.665 79 $ 85,871,668
BCB Bowen Coal Limited 0.095 79 $ 91,753,146
VUL Vulcan Energy 12.77 78 $ 1,248,554,617
HXL Hexima 0.26 78 $ 30,093,102
MSL MSL Solutions Ltd. 0.19 75 $ 62,656,449
SYA Sayona Mining Ltd 0.097 74 $ 530,062,925
DDR Dicker Data Limited 14.02 74 $ 2,389,545,118
MNS Magnis Energy Tech 0.395 70 $ 330,765,127
EGR Ecograf Limited 0.91 70 $ 389,105,942
CXO Core Lithium 0.3225 70 $ 369,846,935
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Running hottest this week was Red Hill Iron (ASX:RHI), and with good reason.

The company lived the small cap dream last week when it sold its 40% stake in the 820 million tonne Red Hill Iron Ore joint venture for a lazy $400m in cash.

That news prompted a 270% intraday gain last Monday, and the stock kept climbing throughout the week. Shares in RHI are now up by more than 2,000% over the past year.

Elsewhere in the Running Hot list, a central theme (or rather question) emerged, as Stockhead’s Reuben Adams put it last week; what the hell is going on with lithium stocks?

No less than seven lithium stocks posted a 14-day RSI above 70, led by Lake Resources (ASX:LKE) which registered a reading of 87.

LKE shares have almost tripled since late May, with steady gains that have continued into August amid relatively little news flow.

Rounding out the top three was Lithium Energy (ASX:LEL), which debuted on the ASX in May and closed on Friday at 65c — a 225% premium to its listing price.

Shares in the company popped again on Thursday, after it announced that its Solaroz lithium project is entering the final stages of evaluation by regulatory authorities in Argentina.

 

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, August 6:

Scroll or swipe to reveal table. Click headings to sort.

Code Company Price RSI MktCap$
BKY Berkeley Energia Ltd 0.295 30 $ 75,104,751
OSX Osteopore Limited 0.37 30 $ 28,873,986
CAN Cann Group Ltd 0.2875 30 $ 86,216,857
CAQ CAQ Holdings Ltd 0.014 28 $ 10,049,008
CWN Crown Resorts Ltd 8.52 27 $ 5,945,449,619
OPY Openpay Group 1.135 27 $ 126,585,217
AGR Aguia Res Ltd 0.037 26 $ 12,012,928
MVP Medical Developments 3.71 26 $ 270,805,754
APV Appsvill 0.05 26 $ 4,613,062
AGL AGL Energy 7.23 25 $ 4,641,601,743
ICR Intelicare Holdings 0.145 25 $ 7,746,854
GMN Gold Mountain Ltd 0.021 22 $ 15,354,498
BUD Buddy Technologies 0.019 20 $ 62,402,181
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Tech firm Appsvillage (ASX:APV) was among the stocks running cold, with a 14-day RSI of 23.

From November 2019 highs of almost 40c, shares in the company have declined steadily and the stock closed on Friday at 4.3c.

APV’s 4C filing for the June quarter showed it booked net cash outflows of $812,543 on receipts of $95,210, and finished the quarter with $896,671 in cash.