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

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Each Monday, Stockhead recaps the stocks most heavily in demand by investors.

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

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, September 18:

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

The Running Hot list remains well populated, with 80 small caps posting a 14-day RSI above 70 this week — down slightly from 81 last week.

Topping the list this week was mining minnow East Energy Resources (ASX:EER), which would be no surprise to anyone who tracked the stock’s meteoric rise on Wednesday — a gain of 1,000 per cent on what appeared to be no news.

East Energy wasn’t the only small cap to post an eye-watering rally last week, in what amounted to an unusual few days of trade where plenty of other stocks followed suit. For now, EER shares are in a trading suspension at the request of the company.

Running Cold

Here’s a summary of the stocks that were running hot for the two weeks ended Friday, September 18:

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

As a broader sentiment indicator, the Running Cold list is leaning decidedly bullish, with just 11 ASX small caps registering a 14-day RSI below 30.

As a result, Stockhead’s data team expanded this week’s list to include all stocks with an RSI below 35, which increased the number of companies on the list to 37.

Among the notable companies on the list were infant formula maker Bubs Australia (ASX:BUB), which in late-August flagged plans for an in-house China production strategy amid increased geo-political risk.

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