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

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

It provides a measure of which stocks are most in demand, and which stocks investors are neglecting.

Often, changes in the RSI are reflective of market reactions to market announcements or changes in earnings forecasts.

But it can also offer a gauge on which stocks may be running ahead of their earnings fundamentals, and alternatively which companies might be running under the radar.

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

Logistics company Chalmers Ltd (ASX:CHR) has been running hot, and with good reason.

The small cap warehouse and storage outfit — backed by trucking magnate Lindsay Fox — recently came into the sights of its larger competitor Qube Logistics (ASX:QUB).

Last Monday Qube lobbed a bidder’s statement for an off-market takeover offer, giving Chalmers shareholders the option to receive 2.31 Qube shares or $6.50 in cash. The offer was unanimously approved by the Chalmers board.

The offer was a 38 per cent premium to Chalmers’ closing price on June 25. The shares in the company continued to climb last week to close on Friday at $7.10.

It was a similar story for IT company GBST Holdings (ASX:GBT), which now finds itself the subject of a bidding war after UK-based FNZ upped the ante with an offer valuing the company at $3.65 per share.

That came after GBST released a statement on Wednesday in which the board said it intended to recommend an indicative bid of $3.60 from US-based suitor SS&C Technologies.

And Capricorn Metals (ASX:CMM) ran hot after providing an update last week on drilling results at its Karlawinda gold project.

The company followed that with news of some key hires and a $15m share placement priced at 6.5c. After rallying last week, shares in CMM are now trading at more than double that at 14.5c.

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, July 5:

Running cold

Resources minnow Ora Banda Mining (ASX:OBM) recently rejoined the ASX, having completed a recapitalisation program which left the company with $15m in cash to pursue “detailed mine planning and regional exploration programs”.

However, it’s been icy cold on the Relative Strength Index, posting a 2-week reading of just 14.52.

Also falling into this week’s Running Cold section was buy now, pay later platform Splitit (ASX:SPT).

Sentiment for the stock has cooled since it list in January at 20c and promptly surged higher.

At the height of the buying frenzy — when the company’s RSI reading reached 98 — SPT shares hit an intra-day high of $2. They closed on Friday at 52c.

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, July 5:

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