The “hottest ASX stock” – in other words, the stock with the highest RSI – this week is Rumble Resources (ASX:RTR).

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, April 23:

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

Rumble and its joint venture partner Zenith Minerals (ASX:ZNC) – which has recorded an RSI of 90 – have been running hot since announcing a big lead-zinc discovery at their Earaheedy project in WA.

Also with an RSI of 97 is Merchant House (ASX:MHI), but it has not traded this week, pending ASX queries into the announcement on Friday April 16 about a US$20 million factory sale that sent it surging.

Mediland Pharm (ASX:MPH) has a high RSI too despite not moving much in the past few weeks and having no news.

The company runs stores focused on Chinese tourists and the daigou trade – a market that was running hot when it first listed but has literally evaporated in the past 12 months.

ASX stocks entering the hydrogen space have consistently been among the hottest and Lion Energy (ASX:LIO) was no exemption. Last Friday, it announced it was undertaking feasibility studies into entering hydrogen and raised $2.8 million for them.

 

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, April 23:

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

Two stocks running cold were Redbubble (ASX:RBL) and Kogan (ASX:KGN) which released financial results last week.

Both stocks had been among the ASX’s hottest stocks during COVID-19 but in what is arguably a sign a return to pre-COVID norms is under way, the pair fell, despite strong results.