Momentum trading involves buying a stock that has shown a significant movement in price or volume.<\/p>\n
One of the main benefits of momentum trading is that\u00a0it can generate high returns in a short period of time, especially in volatile markets.<\/p>\n
Obviously there\u2019s a bit of risk involved in momentum trading because in essence, you\u2019re making a decision to buy a stock based on recent buying activities of other traders.<\/p>\n
So to be a successful momentum trader, one needs to be able to identify the best stocks quickly and accurately.<\/p>\n
The goal for momentum traders is basically to enter into trades at key points in the trend in order to maximise profits.<\/p>\n
There are several indicators to quantify momentum, and here we look at three main signals used by the market:<\/p>\n
52-week high<\/strong> \u00a0<\/p>\n Traders often view the\u00a052-week highs\u00a0as entry signals.<\/p>\n This is due what\u2019s called the \u201c52-week high effect\u201d<\/strong> \u2013 where if \u00a0a 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.<\/p>\n On the other hand, if a stock is far away from its 52-week high, chartists believe the momentum will continue going that way.<\/p>\n \u00a0<\/p>\n (Data from Commsec)<\/p>\n WordPress Tables Plugin<\/a><\/p>\n \u00a0<\/p>\n BTC Health (ASX:BTC)<\/a><\/strong><\/p>\n The biotech sector investor says its wholly owned investee company, BioImpact, will retain exclusive rights to distribute Bronchitol<\/strong> and Aridol<\/strong> in Australia.<\/p>\n This, BTC says, is despite an announcement by Pharmaxis (ASX: PXS)<\/a>, advising it has agreed to sell its mannitol business to Arana Pharma.<\/p>\n BTC says there is no change in respect of the exclusive licence and distribution rights currently held by BioImpact.<\/p>\n \u201cIt is expected that the distribution agreement between Pharmaxis and BioImpact, which was entered into on 30 June 2021, with an initial term of 10 years, will be assigned from Pharmaxis across to Arana Pharma in due course,\u201d said BTC.<\/p>\n \u00a0<\/p>\n Southern Hemisphere Mining (ASX:SUH)<\/a><\/strong><\/p>\n SUH has entered into a drilling contract with DV Drilling in Chile for Diamond and RC drilling at its flagship Llahuin Copper-Gold Project<\/strong>.<\/p>\n The drilling program will test multiple targets generated from the recent soil geochemistry sampling program, and downdip zones from the previous drilling program.<\/p>\n The Southern Porphyry copper-gold target will also be tested in the program,<\/p>\n Recent rock chip sampling highlight grades of up to 7.28%Cu, 18.65g\/t Au, 55g\/t Ag.<\/p>\n \u00a0<\/p>\n IMEXHS (ASX:IME)<\/a><\/strong><\/p>\n IMEXHS Radiology services (RIMAB)<\/strong> has won a new $1.6m, three-year contract, with the San Carlos Hospital Foundation<\/strong> in Bogota, Colombia.<\/p>\n The contract is expected to contribute $530,000 in Annual Recurring Revenue (ARR).<\/p>\n IMEXHS\u2019s cloud-based Enterprise Software is to be implemented at the San Carlos Hospital Foundation.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Simple Moving Averages (or SMA)<\/strong>\u00a0is another indicator that can be used to gauge momentum.<\/p>\n 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.<\/p>\n 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,\u00a0the trend is down. (Data from Commsec)<\/p>\n WordPress Tables Plugin<\/a><\/p>\n \u00a0<\/p>\n ADX Energy (ASX:ADX)<\/a><\/strong><\/p>\n ADX said it expects to receive an environmental clearance from in Austria on or before 30 October for the Welchau Gas Prospect<\/strong>.<\/p>\n The environmental clearance is the last regulatory requirement to commence operations on the project.<\/p>\n Upon receipt of the environmental clearance, ADX will commence drill site construction and plans to commence Welchau-1 drilling operations during December.<\/p>\n \u00a0<\/p>\n BBX Minerals (ASX:BBX)<\/a><\/strong><\/p>\n BBX announced the repayment of the funding facility with Lind Global Fund II LP<\/strong>, which was announced on 31 March.<\/p>\n Following the completion of tranche 1 of the recent capital raising, the company has taken the decision to repay the funding facility.<\/p>\n This repayment eliminates the market uncertainty surrounding the ongoing conversion of this instrument to equity.<\/p>\n \u00a0<\/p>\n Here\u2019s another momentum signal used by the market \u2013 the Relative Strength Index (RSI)<\/strong>.<\/p>\n RSI is a measure of the strength of a stock\u2019s momentum, either in the upward or the downward direction, and is used to indicate whether a stock is oversold or undersold.<\/p>\n Generally speaking, an RSI above 70 means a stock is overbought; and an RSI below 30 indicates that it\u2019s oversold.<\/p>\n An RSI above 80 meanwhile is strongly overbought, and an RSI below 20 is strongly oversold.<\/p>\n (Data from Commsec)<\/p>\n WordPress Tables Plugin<\/a><\/p>\n \u00a0<\/p>\n Swift Networks (ASX:SW1)<\/a><\/strong><\/p>\n Swift announced new agreements generating $1.6 million in revenue.<\/p>\n Swift has signed new infrastructure and subscription contracts with multiple aged care providers<\/strong>, including Eldercare, Royal Freemasons, and Retiree\u2019s WA.<\/p>\n Renewal also signed for Hall and Prior\u2019s Karingal Green Health & Aged Care Community.<\/p>\n Mineral Resources (ASX:MIN)<\/a> meanwhile has expanded its agreement with Swift for an additional four sites.<\/p>\n \u00a0<\/p>\n Streamplay Studio (ASX:SP8)<\/a><\/strong><\/p>\n Streamplay has continued its expansion into Pacific markets with Telstra-owned Digicel Pacific<\/strong> in Vanuatu.<\/p>\n Streamplay\u2019s integration with Digicel is near complete in Fiji, with imminent launch of services in coming weeks.<\/p>\n The partnership with Digicel Pacific also marks a strategic expansion into the Vanuatu market, enhancing its competitive position in digital entertainment across the Pacific Islands.<\/p>\n \u00a0<\/p>\n At Stockhead we tell it like it is. While Southern Hemisphere Mining and ADX Energy are Stockhead advertisers, they did not sponsor this article.<\/em><\/p>\n \u00a0<\/p>\n <\/span><\/p>\n The post Hot Money Monday: Which ASX small caps are riding high on momentum, and which are oversold?<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nSimple Moving Average<\/strong>
\nRelative Strength Index<\/strong><\/p>\n10 ASX small caps nearest or at 52-week highs<\/h2>\n
10 ASX small caps at 52-week high<\/strong><\/h2>\n
10 ASX small caps with prices above SMA<\/h2>\n
\n\u00a0<\/p>\n10 ASX small caps at prices above SMA<\/h2>\n
10 ASX small caps with low RSI (Oversold)<\/h2>\n
<\/h2>\n
10 ASX small caps at prices with RSI Oversold Signal<\/h2>\n