We look at which ASX stocks are trading on a momentum. Picture Getty
Hot Money Monday: These are the top momentum stocks; and introducing the Simple Moving Average
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- We look at which ASX stocks are trading on a momentum
- 52-week high and RSI are two indicators of momentum
- Simple Moving Average is also another measure of momentum
Last week, we looked at how traders find stocks that are trading with momentum.
We saw how most technical traders view the 52-week highs as entry signals.
That’s due to what’s called the “52-week high effect” – where if a price has broken out above its 52-week range, there must be some factor that generated enough momentum to further continue the price movement in the same direction.
On the other hand, if a stock is far away from its 52-week high, chartists believe the momentum will continue going that way.
Top 10 ASX small caps nearest or at 52-week highs
| Code | Name | Price | How far from 52-Week High? |
|---|---|---|---|
| CII | CI Resources | $1.55 | 0.00% |
| BIT | Biotron | $0.05 | 0.00% |
| CAA | Capral | $9.10 | 0.00% |
| FRM | Farm Pride Foods | $0.14 | 0.00% |
| HZN | Horizon Oil | $0.18 | 0.00% |
| LKO | Lakes Blue Energy | $0.00 | 0.00% |
| STK | Strickland Metals | $0.06 | 0.00% |
| TGM | Theta Gold Mines | $0.15 | 0.00% |
| NPM | Newpeak Metals | $0.00 | 0.00% |
| CWX | Carawine Resources | $0.15 | 0.00% |
CII announced a deal to sell Malaysian asset CheekahKemayan Plantations, a wholly-owned subsidiary of CII’s 100%-owned subsidiary Phosphate Resources, for consideration of RM$155 million (or around $52 million).
Funds from the sale will be used to progress CI Resources’ diversification strategy, which includes strengthening the company’s fertiliser and logistics businesses.
The genetics cell-focused biotech company has been getting a couple of speeding tickets from the ASX as the company’s share price surged.
The company has released a letter to investors, saying that it is in the final stage of three Phase 2 clinical trials for HIV‐1, and COVID‐19.
“This is a pivotal time for the company as it completes data collection and analyses of samples and information collected during the trials ahead of release of headline data in coming weeks,” said the company.
Which stocks are ‘oversold’ as indicated by RSI?
We also looked at how the Relative Strength Index (RSI) can be used to indicate whether a stock is oversold or undersold.
RSI is a measure of the strength of a stock’s momentum, either in the upward or the downward direction.
Generally speaking, an RSI above 70 means a stock is overbought; and an RSI below 30 indicates that it’s oversold.
An RSI above 80 meanwhile is strongly overbought, and an RSI below 20 is strongly oversold.
Top 10 ASX small caps with low 9-day RSI (Oversold)
| Code | Name | 2 Day RSI | 9 Day RSI |
|---|---|---|---|
| SES | SECOS Group | -- | Oversold |
| DGR | DGR Global | Oversold | Oversold |
| JHG | Janus Henderson | -- | Oversold |
| BUB | Bubs Australia | -- | Oversold |
| LEG | Legend Mining | -- | Oversold |
| SIH | Sihayo Gold | Oversold | Oversold |
| PVE | Po Valley Energy | Oversold | Oversold |
| SBR | Sabre Resources | -- | Oversold |
| HYD | Hydrix | -- | Oversold |
| LIN | Lindian Resources | -- | Oversold |
| GGE | Grand Gulf Energy | -- | Oversold |
| STM | Sunstone Metals | Oversold | Oversold |
The packaging company has been sold down after reporting a -26% decline in sales for FY23.
The company has also extending its losses, with NPAT of -$6.75m from -$3.08m a year earlier.
SECOS suffered significant losses in its resin business, down 51.9% on pcp, due to logistic and pandemic factors that led to excess resin inventory being held.
DGR Global and Armour Energy (ASX: AJQ) have established a new UK-incorporated company ‘Conjugate Energy’, which will hold interests in oil exploration projects in the Albertine Graben, Uganda.
Conjugate intends to seek admission to a UK stock exchange and raise funds primarily to drill two exploration wells or drill ready prospects with substantial resources of oil.
Simple Moving Averages (SMA) also indicates momentum
Here’s another indicator that can be used to gauge momentum, i.e. whether a stock is in an upward or downward trend.
The Moving Averages is one of the core indicators in technical analysis, and the Simple Moving Averages, or SMA, is the easiest moving average to construct.
The formula for calculating SMA is pretty straightforward – it’s just the average price over a specified period:
SMA = (A1 + A2 + ….. An) / n
where:
An = the price of the stock at period n
n = the number of total periods
The average is called “moving” because it is plotted on the chart bar by bar, forming a line that moves along the chart as the average value changes.
SMAs can smooth price data and cancel out short term noises (price fluctuations). The larger the number of total periods (n) in your SMA calculation, the smoother the chart is which in turn makes it easier to view the price trend of the stock.
SMA is often used to determine whether a stock price will continue in the same direction, or if it will reverse a bull or bear trend.
As a general rule, if the current stock price is above the SMA, the price trend is up. If the price is below the SMA, the trend is down.
Top 10 ASX small caps with prices above SMA
| Code | Name | Last Price Value | Price vs. 20 day SMA | Price vs. 50 day SMA | Price vs. 200 day SMA |
|---|---|---|---|---|---|
| FL1 | First Lithium | $0.27 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| CKA | Cokal | $0.12 | >5% Above SMA | 1 to 5% Above SMA | < -5% Below SMA |
| CT1 | Constellation Technologies | $0.00 | >5% Above SMA | < -5% Below SMA | < -5% Below SMA |
| AJL | AJ Lucas | $0.02 | >5% Above SMA | >5% Above SMA | < -5% Below SMA |
| ATP | Atlas Pearls | $0.07 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| BIT | Biotron | $0.05 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| BTC | BTC Health | $0.04 | >5% Above SMA | >5% Above SMA | 1 to 5% Above SMA |
| DYL | Deep Yellow | $1.29 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| GTG | Genetic Technologies | $0.00 | >5% Above SMA | 1 to 5% Above SMA | < -5% Below SMA |
| JGH | Jade Gas | $0.04 | >5% Above SMA | 0 to -1% Below SMA | < -5% Below SMA |
| ICN | Icon Energy | $0.01 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| CNW | Cirrus Networks | $0.06 | >5% Above SMA | >5% Above SMA | >5% Above SMA |
| MTL | Mantle Minerals | $0.00 | >5% Above SMA | >5% Above SMA | -1 to -5% Below SMA |
| MTB | Mount Burgess Mining NL | $0.00 | >5% Above SMA | 1 to 5% Above SMA | -1 to -5% Below SMA |
First Lithium jumped back to work on the ASX after a long and lonely suspension.
FL1 stock clocked in at over +41% by lunch in a warm welcome back, to finish the day up more than 47% on Thursday.
FL1 is hunting spodumene in Mali, just down the road from Goulamina where China’s Ganfeng and $700 million capped ASX developer Leo Lithium (ASX:LLL) plan to open Africa’s first major spod mine next year at a world class 500,000tpa.
Cokal announced that it has finally received a Jetty Operations Permit associated with the Bumi Barito Mineral metallurgical coal mine (Cokal 60%).
The process of securing this permit led to unanticipated delays in Cokal’s first sale of coal.
Cokal will now move forward with the immediate priority of scheduling the maiden shipment of BBM coal at the earliest possible time.
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