Investors will be watching for updates on Traka Resources (ASX:TKL) this week, after the gold explorer ripped higher on no news to post an RSI reading of 91.

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, May 28:

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

After a couple of health stocks topped the pops last week, resources companies restored order this week amid broader strength in the commodities complex.

Swoop Holdings (ASX:SWP) hasn’t been on the ASX for 14 days yet, but it posted an RSI of 88 following a red-hot IPO as investors continue to reward winning models in the telco space.

And property group Devine (ASX:DVN) ran hot on the back of a takeover offer.

But other than that, most gains were led by the mining sector as Traka Resources (ASX:TKL) ran hot.

Something looks to be happening at the company, but investors aren’t sure what yet.

Shares in the junior gold explorer ripped higher last Friday on no news, before TKL shares went into a trading halt pending a further announcement.
 

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, May 28:

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