The Most Overbought and Oversold ASX Stocks

Team Veye | 24-May-2024

Seeking profits from Stocks that are overbought and oversold is no rocket science if an investor is able to identify the point where price action is taking place for him to make an entry.

Overbought and Oversold levels are normally the price of a stock in comparison to its fair value. They help to define market conditions and future trends and often lead to deciding buy and sell points.

Even if a stock or other asset is a good buy, it can remain oversold for a long time before the price starts to move higher. This is why smart traders watch for oversold indications but then wait for the price to start moving up before buying based on the oversold signal. An oversold stock is perceived to be cheaper than it should be, offering an opportunity to buy Oversold Stocks at a discount.

Similarly, Overbought Stocks trigger a cautious view. Investors, generally, liquidate existing or refrain from fresh entries waiting for decent correction to take a fresh view.

Some Oversold Stocks to Buy which were identified early

Renegade Exploration Limited (ASX: RNX)

Renegade Exploration Limited recently announced that a high-resolution gravity geophysical survey at the Mongoose Deeps prospect had revealed a dense gravity anomaly. This anomaly's core directly overlaps with the core of the magnetic anomaly and was comparable in magnitude to the Ernest Henry gravity anomaly.

The "Mongoose Deeps" prospect exhibits a magnetic signature similar to the world-class Ernest Henry Cu-Au mine, located 35 km northeast of Mongoose. Historical geophysical data was reprocessed to reveal this exceptional tier 1 magnetic anomaly, potentially indicating the primary mineralized zone beneath the Mongoose Cu-Au Deposit and Great Australia Cu-Au Mines. The interpreted blind breccia pipe aligns with surface geological observations and copper-gold mineralization.

Following the positive results from a recent gravity geophysical survey at the Mongoose Deeps prospect, which revealed a dense gravity anomaly, Renegade has commenced drilling a diamond drill hole. This drill hole is planned to reach a depth of 1,600 meters and is expected to take between 6 to 8 weeks to complete. This effort underscores the potential for a significant mineral resource discovery at the prospect.

Cleanaway Waste Management Limited (ASX: CWY)

Cleanaway Waste Management Limited's outlook remains promising as it continues to pursue strategic initiatives aimed at expansion and diversification. The integration of the GRL business and the acquisition of Australian Eco Oils bolster the company's presence in key markets and broaden its product offerings. Investments in circular plastic ventures and Energy from Waste projects demonstrate CWY's commitment to sustainability and innovation, positioning it for long-term value creation. 

Cleanaway's focus on operational excellence has led to the restoration of performance foundations in key areas. By successfully restoring performance foundations in critical areas such as QLD Solids, Health Services, and labor management, Cleanaway has not only achieved profitability but also bolstered its operational efficiency through data-driven initiatives. 

With a disciplined approach to capital allocation, CWY is well positioned to drive growth and deliver value to its stakeholders in the near future.

A classic example of one of oversold ASX stocks becoming overbought is Australian Gold and Copper Limited (ASX: AGC)

Australian Gold and Copper Limited had announced the successful closure of a capital investment agreement with Delin Mining Group Cooperation Limited. The infusion of $10.1 million from this investment is earmarked to expedite exploration activities across the company's portfolio as this strategic investment creates a pathway for aggressive exploration, particularly at the South Cobar targets identified at Hilltop, Achilles, and Planet. 

The preceding quarter had seen preparations for the ongoing maiden drilling program at Hilltop within the South Cobar Project in Central NSW. This program, representing the culmination of extensive ground exploration efforts, includes activities such as reconnaissance mapping, soil and rock chip geochemical sampling, and ground-based geophysics conducted over previous quarters. The initial drilling phase is expected to consist of seven to ten reverse circulation (RC) drill holes, totalling between 1,500 to 2,000 meters.


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