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, June 4:

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

Appearing at the top of this week’s Running Hot list was industrial distribution company Stealth Global (ASX:SGI).

The catalyst was some deal news late last week, when SGI announced it would purchase the business assets of WA-based Skipper Transport Parts for $4.2m.

Investors have rewarded SGI for its recent M&A activity, as the stock also rose last November following its acquisition of Brisbane-based tool supplier C&L for $3.8m.

Also making a rare appearance on the list was chicken company Inghams Group (ASX:ING), which has been climbing steadily since late May after the company upgraded its earnings guidance, citing an improvement in general trading conditions as COVID-19 restrictions are wound back.

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, June 4:

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