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

It could be a mark of the reduced volatility seen so far in April that the Running Hot list more or less returned to normal this week.

After Stockhead‘s data team crunched the numbers, a total of 39 companies were shown to be “running hot” with an RSI reading over 70.

That is much closer to the long-run average of 45. And for comparison’s sake, at the height of the market chaos in March the number of stocks that made the cut dwindled to just two or three.

Perhaps not surprisingly, gold explorer Predictive Discovery (ASX:PDI) topped the list after posting an intra-day gain of 733 per cent on Wednesday, following a big gold hit at its project in Guinea.

And while various COVID-19 related announcements can still give rise to big price gains, the top six companies in this weeks list — all with an RSI reading above 80 — were resources stocks.

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, April 17:

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

Running Cold

It was a similar story on the cooler side of the ledger, where we were able to increase the RSI cutoff back to its standard measure of 30.

During March, the number of companies “running cold” started numbering well into the hundreds, to the point we had to only include companies with an RSI below 15 for the two weeks ended Friday, March 13.

But with the reduction in volatility, things have normalised somewhat (for now). This week, there were a total of 60 companies on the list with an RSI below 30.

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, April 17:

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

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