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

Topping the list for the second straight week — a relatively rare feat in Hot Money — was WA gold miner Tribune Resources (ASX: TBR).

The stock posted a two-week RSI of 87.95, cooling off slightly from the prior fortnightly reading of 90.5. But the share price is still climbing, up to $7.63 from the previous Friday’s close of $7.11.

That marks a gain of 77 per cent since the start of June — a period in which the company hasn’t made a single announcement to the market.

Behind the scenes, the company may still be the subject of tug-of-war between two larger players — Evolution Mining (ASX:EVN) and Northern Star Resources (ASX:NST).

Also running hot this past fortnight was Cynata Therapeutics (ASX: CYP), which confirmed on Friday it had received a non-binding takeover offer from Japanese pharmaceutical company Sumitomo Dainippon priced at $2 per share.

And IT company Objective Corp (ASX: OCL) moved further up the list with an RSI of 82.68, after the share price climbed from $2.83 to $3.56 last week.

It followed a trading update which showed the company expects net profit after tax for the 2019 to be $9.1m, driven by strong growth in its subscription-revenue product lines.

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, July 19:

Code Name RSI - 2 weeks Price ($) Market Cap
TBR TRIBUNE RESOURCES LTD 87.95 7.55 410.72M
CYP CYNATA THERAPEUTICS LTD 87.94 1.77 163.02M
OCL OBJECTIVE CORPORATION LTD 82.68 3.55 329.72M
OVN OVENTUS MEDICAL LTD 82.5 0.49 47.67M
DTL DATA#3 LTD 80.26 2.6 391.10M
SVL SILVER MINES LTD 79.58 0.07 46.69M
TLX TELIX PHARMACEUTICALS LTD 79.52 1.75 355.94M
MEM MEMPHASYS LTD 79.42 0.06 33.50M
SEN SENETAS CORP LTD 79.41 0.09 91.91M
AFG AUSTRALIAN FINANCE GROUP LTD 78.85 1.9 396.33M
LPI LITHIUM POWER INTERNATIONAL 78.66 0.35 87.94M
IBX IMAGION BIOSYSTEMS LTD 78.11 0.05 16.51M
GSN GREAT SOUTHERN MINING LTD 77.97 0.05 14.56M
HCO HYLEA METALS LTD 77.76 0.07 7.31M
EAR ECHO RESOURCES LTD 77.67 0.22 145.13M
CHR CHALMERS LTD 77.37 7.05 54.06M
BGH BLIGH RESOURCES LTD 77.31 0.14 42.98M
MDC MEDLAB CLINICAL LTD 76.95 0.44 93.68M
AQI ALICANTO MINERALS LTD 76.77 0.06 9.49M
CMM CAPRICORN METALS LTD 76.47 0.17 156.79M
FLN FREELANCER LTD 76.24 0.98 437.49M
RNO RHINOMED LTD 76.18 0.34 48.97M
CAF CENTREPOINT ALLIANCE LTD 76.15 0.14 17.87M
SM8 SMART MARINE SYSTEMS LTD 76.01 0.03 9.85M
SWF SELFWEALTH LTD 75.96 0.17 28.96M
LTR LIONTOWN RESOURCES LTD 75.9 0.14 215.51M
BDA BOD AUSTRALIA LTD 75.7 0.46 25.33M
JAY JAYRIDE GROUP LTD 75.53 0.4 28.67M
MOD MOD RESOURCES LTD 75.47 0.44 132.24M
YOJ YOJEE LTD 75.46 0.12 97.46M
IVR INVESTIGATOR RESOURCES LTD 75.42 0.01 9.62M
MAQ MACQUARIE TELECOM GROUP LTD 75.35 22.87 484.98M

Running cold

Among stocks with an RSI below 30, there may be some hidden gems that have been neglected by the market despite sound fundamentals.

But in general, the list is less volatile that stocks running hot — if the market is ignoring these companies, it’s usually for a reason.

Bringing up the rear this week was Superloop (ASX: SLC), after a letter from the chairman which cast doubt on the company’s profit guidance for the 2020 financial year (along with a downgrade to previous FY19 guidance).

It’s been a tough few months for the telecommunications company, which owns fibre networks that connect Australia with Asian markets in Singapore and Hong Kong.

A proposed takeover offer by the government-owned Queensland Investment Corporation at $1.90 fell through in May for unknown reasons. On Thursday, Superloop chairman Michael Malone said “negotiations of the transaction continue”. Shares in SLC closed on Friday at 97.5 cents.

These are the stocks that were running cold for the two weeks ended Friday, July 19:

Code Name RSI - 2 weeks Price ($) Market Cap
AON APOLLO MINERALS LTD 29.85 0.04 6.89M
BLT BENITEC BIOPHARMA LTD 29.76 0.05 13.11M
OVT OVATO LTD 29.63 0.06 44.65M
MHI MERCHANT HOUSE INTL LTD 29.37 0.09 8.20M
JHC JAPARA HEALTHCARE LTD 29.36 1.04 280.61M
LCT LIVING CELL TECHNOLOGIES LTD 28.93 0.02 11.43M
TDO 3D OIL LTD 28.81 0.08 20.42M
SCN SCORPION MINERALS LTD 28.61 0.004 708.10k
OMN ONEMARKET LTD 28.29 0.65 67.55M
CVC CVC LTD 28.13 2.37 278.93M
EZL EUROZ LTD 27.81 1.13 193.19M
IGN IGNITE LTD 27.65 0.05 4.03M
ENE ENEVIS LTD 27.62 0.2 13.32M
SDA SPEEDCAST INTERNATIONAL LTD 27.5 1.81 442.32M
BRV BIG RIVER GOLD LTD 26.76 0.01 9.25M
PUR PURSUIT MINERALS LTD 26.68 0.01 2.68M
TNK THINK CHILDCARE LTD 26.51 1.47 90.71M
KPE KINA PETROLEUM CORP 26.08 1.1 14.10M
SYA SAYONA MINING LTD 26.04 0.01 12.06M
ECT ENVIRONMENTAL CLEAN TECHNOLOGY 25.21 0.004 19.20M
SGLLV RICEGROWERS LIMITED 24.08 4.85 284.82M
ARQ ARQ GROUP LTD 23.79 0.67 81.22M
OLH OLDFIELDS HOLDINGS LTD 23.07 0.03 2.79M
ANW AUS TIN MINING LTD 22.93 0.01 15.23M
EMB EMBELTON LTD 22.27 10.5 22.66M
LHB LIONHUB GROUP LTD 16.83 0.005 4.13M
OBM ORA BANDA MINING LTD 16.77 0.15 72.96M
SHK STONE RESOURCES AUSTRALIA LT 14.14 0.001 811.65k
SLC SUPERLOOP LTD 12.12 0.975 250.77M