Each week, Stockhead recaps ASX stocks that are “running hot” as deduced by the Relative Strength Index (RSI).

The RSI is 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, October 1:

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

Last week, we bought your attention to the fortunes of Viagold Rare Earths (ASX:VIA), a $40m company which carries out rare earths processing operations on the Chinese mainland.

On August 27, the stock traded at 4.2c. Through to last Monday, it assembled a tidy 600% gain in the month of September.

Then it kept mooning — ripping higher by another 60% last week to close at 48c for an easy one-month 10-bagger. (Oh, and it has a 14-day RSI of 98 — that’s hot).

Throughout that heady rally, the only public announcement from the company was last Tuesday when got a speeding ticket from the ASX, and said it wasn’t aware of any information that would prompt such a rally.

Switching from rare earths to telco stocks, Tuas Ltd (ASX:TUA) — the ASX-listed, Singapore-based spinoff of telco heavyweight TPG Telecom — has had a big week, following the release of its annual report last Tuesday which showed a tripling in subscriber numbers to 392,000 over the past 11 months.

Shares in Tuas jumped by 31.27% on the day of the release and kept climbing, giving the stock a sharp breakout from its 12-month trading range and a 14-day RSI of 90.

At the big end of town, $3.4bn oil producer Beach Energy (ASX:BPT) made an appearance on this week’s list with an RSI of 70.

Prior to the stock’s recent rally, fund manager Michael Goldberg told Stockhead that he was snapping up BPT shares on a low valuation, after the stock got hammered earlier this year following a production downgrade.

Since that point the company has recouped most of those falls with a ~40% rally, accompanying bullish price action for energy stocks as oil prices hit three-year highs above US$80/barrel.

Running Cold

Here’s a summary of the stocks that were running cold for the two weeks ended Friday, October 1:

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

Among the stocks on this week’s Running Cold list was PPK Group (ASX:PPK), where investors continue to hit the sell button after sending the stock more than 10,000% higher since 2017.

Following another week of selling, PPK shares closed the week below $15 — down from all-time highs above $21.

In happier news for PPK, it also owns a 45.3% stake in spinout company Li-S Energy (ASX:LIS), which is aiming to commercialised lithium sulphur battery technology and enjoyed a notably auspicious start to life as a public company last week.