Hot Money Monday: The most in-demand stocks on the ASX right now

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Each Monday, Stockhead recaps which stocks are most heavily in demand by investors — running hot.

The analysis is based on the Relative Strength Index (RSI), 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 lookout for opportunities where the price-action has separated from fundamentals.

Running Hot

In this week’s instalment of “HMM – Bear Market Edition”, we have maintained the RSI cutoff at 60 (instead of the standard 70) for the Running Hot section, to provide a broader snapshot of companies that may still have a hint of positive news flow amid the current malaise.

That brought the total number of companies on the list to 12, just up from last week’s total of 11. (For context, prior to the corona crisis there was an average of around 45 stocks with an RSI above 70).

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, March 20:

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

This week’s Hot Money list was populated by a number of companies who released statements to the market tying their business operations to treatments for COVID-19.

However, by the end of the week the ASX made it clear it was specifically targeting some of the more opportunistic entities.

TBG Diagnostics (ASX:TDL) led the pack, after announcing on Wednesday it had European regulatory approval for a COVID-19 testing kit.

But by Friday the ASX had put the stock in suspension, questioning why TBG waited until Wednesday to announce news that it had received the previous Saturday. (In the intervening period, the company’s stock price shot higher by almost 200 per cent).

And the performance of ed-tech platform OpenLearning (ASX:OLL) showed that even amid the market chaos, investors are still on the lookout for good news out of China.

The stock ripped higher to start the week after announcing a partnership with Chinese e-commerce giant Alibaba. The deal will connect OpenLearning to Alibaba’s cloud platform to offer students in mainland China “high-speed access to online courses through OpenLearning’s platform”.

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, March 20:

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

As the bear market becomes more entrenched, the Running Cold list has become a process of elmination.

Last week, we cut the total to only include stocks with an RSI below 20. There were still 99 stocks on the list, but this week that number has climbed to 260.

So we’ve cut back again, to stocks with an RSI below 15. With small-cap demand still in a broad state of decline, a total of 89 stocks ended up on this week’s list.

At Stockhead, we tell it like it is. While OpenLearning is a Stockhead advertiser, it did not sponsor this article.

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