NovaGold (NG) is a precious metals company engaged in the exploration and development of mineral properties in Alaska, the U.S. and British Columbia, Canada. Its current market cap is $3.12 billion, and the stock is off by about 3.3% so far in 2011.
I love the way that NovaGold is setting up here technically. If you take a look at the chart, you'll see that the stock is very close to breaking out above a key descending trend line, and volume is increasing dramatically. Volume on Tuesday (an up day) was 7.3 million, which is well above the three-month average volume of 4.4 million. Now all we need to see is one more strong volume day and for the stock to bust above that descending trend line.
If we get it, I would be buying aggressively and then adding to my position as the stock takes out the next significant resistance levels seen on the chart. The play here would be for a run back its 52-week high of $16.90 a share. If we can't get above that descending trend line, then I would avoid the stock for now.I would also like to point out that NG has a reasonable short interest that could help to power the stock higher if it does breakout. As of March 15, the short interest as a percentage of the float for NG sits at around 7.7%. If this stock starts to take off, and I think it will, then we could easily see some short covering that will help power the stock higher. NovaGold, which shows up in both George Soros' portfolio and John Paulson's as of the most recently reported period, was recently highlighted on a list of 7 Mining Stocks Analysts Expect to Soar
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV