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TheStreet Open House

6 Precious Metals Stocks Set to Explode

Mino Gold

Mino Gold (MGH) is an exploration-stage company engaged in the exploration and acquisition of gold properties in the People's Republic of China. This is a very speculative gold player with a market cap of $120.34 million. So far in 2011 the stock is off by around 9.5%, but things look ready to change rapidly for Mino Gold.

If you take a look at the chart for Mino Gold, you'll see that the stock has been forming a basing chart pattern for the past couple of months between $2.90 and $2. This is a healthy pattern to see in a stock because it means it's building up energy for a run higher. Of course, that's as long as it doesn't break below the lower end of the pattern, which MGH hasn't. Now the stock looks ready to make a fresh run at $2.90 since it's started to move above the 50-day moving average of $2.32 a share.

Related: Gold Stocks Owned by Hedge Funds

What traders should watch for now is for volume to increase dramatically if MGH can break out above $2.90. I would suggest watching for volume to come in to MGH that are well above the three-month average trading activity of 518,000 shares. If the stock does break out, this will be a major development, because it will mean MGH is trading at brand new all-time highs.

The stock could easily double if that occurs, so consider buying some shares now in anticipation of the breakout. You can manage your risk in this trade by simply selling the stock if it moves below some near-term support at $2.25 a share. I like the setup here, and I think MGH has tremendous upside from current levels.

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