The relative strength index (RSI) is an important technical indicator for stock traders.

It helps measure how actions of the “herd” may drive the stock of a given company up or down — moves which may not always be in line with the company’s fundamentals.

For a detailed description of how it works, click here.

Each week, Stockhead provides a simple summary of outliers on the RSI, to get a technical gauge of how trading momentum is affecting the price action.

A reading of 70 is seen as the level at which a company’s been overbought. If a stock has a reading of 30 or below, it may be undervalued. Here’s this week’s list:

Running hot

Over the past two weeks, 17 companies recorded an RSI reading of at least 75.

The company most in demand was Jayex Healthcare (ASX: JHL) which recorded an RSI reading of 82.84. JHL is a medical tech platform which provides cloud-based logistical solutions for the healthcare industry.

The stock was one of the best performers on the Small Ords last week, surging almost 47 per cent higher to 5.8 cents after trading flat for May.

In response to an ASX price query, JHL said it’s “currently assessing potential acquisitions”, but apart from that the company was unaware of any other catalysts that may have sparked a surge in demand.

PainChek (ASX:PCK) has also been running hot after securing a $5m grant from the federal government and successfully getting its pain recognition app software into the UK market — developments which have seen the company’s share price triple since April.

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, May 31:


 

Running cold

Over the past two weeks, a total of 20 stocks recorded an RSI reading of 25 or less.

Business software company Empired Ltd (ASX: EPD) recording the lowest rating, with an RSI measure of just 10.68.

Empired director John Bardwell has been adding to his position in the company in recent weeks, purchasing 65,000 EPD shares on May 20 followed by further 85,000 on May 26.

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, May 31: