The Fortune Teller Fish is made of the same chemical used in disposable diapers, sodium polyacrylate. Sodium polyacrylate will grab onto water molecules that it touches, changing the shape of the molecule. As the molecules change shape, so does the shape of the fish. If you submerge the fish in water, it won't be able to bend when you place it on your hand. If you let the fortune teller fish dry out, it will be good as new.
Science teachers commonly hand out these fish to students and ask them to explain how they work. Students propose a hypothesis to describe how the fortune teller fish works and then can design an experiment to test the hypothesis. Usually students think the fish may move in response to body heat or electricity or by absorbing chemicals from the skin (salt, oil, water).