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

There was a new leader this week as small-cap gold explorer Tribune Resources (ASX: TBR) topped the list with an RSI reading of 90.5.

The company hasn’t made any announcements to the market since late May, but the stock price has steadily increased from around $4.40 in that time. Friday’s close of $7.11 capped a weekly gain of more than 16 per cent.

In February this year, the company became the focal point of a strategic battle between two bigger players when Evolution Mining (ASX: EVN) acquired a 19.9 per cent stake in Tribune for $41.3 million.

The majority partner in Tribune’s East Kundana joint venture is Evolution’s rival Northern Star Resources (ASX:NST).

Elsewhere, this week’s RSI data suggests that healthcare stocks are well and truly in the sights of small cap investors.

There were eight other stocks that posted an RSI above 80 this week and five of them were in healthcare, led by medicinal cannabis play Impression Health (ASX: IHL) which posted an RSI of 84.93.

And also worth a mention is fintech company Quickfee, which doesn’t appear on the list because it only listed on Wednesday at 20 cents. But during those three days, investors piled into the stock and briefly drove it above 60 cents — good enough for an RSI reading of 98.

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, July 12:

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Running cold

The icy-cold end of the RSI measure tends not to move around as much, and is typically populated by struggling minnow stocks that have given investors plenty of reason to shun them.

Looking at the broader list, there were some notable names that popped in this week led by sunscreen maker Advance Nanotek (ASX: ANO) — the best performer on the ASX through the early part of 2019.

This week, the share price slumped — so much so that the ASX asked what was going on. In response, ANO said it’s not sure, but noted that the price action was being driven by trades a low volume of shares.

Buy now, pay later platform Splitit (ASX: SPT) entered the cold-money list last week with a reading of 29.73, and this week slipped further to 26.51 as the share price continued its recent decline to close at 48 cents.

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

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