Entree Gold: A Chart View

NEW YORK (TheStreet) -- Precious metals and mining stocks continue to be excellent performers in the current investing landscape. There are many small "junior miners" that have great looking charts. Many are overlooked and others are overworked, but one name that hasn't received a lot of attention but appears to be readying for a potential topside break on the long-term time frame is Entree Gold (EGI).

It is headquartered in Canada and its geographic exploration activities range from Mongolia and China to Canada and the United States. It is a speculative exploration play so you will need to monitor the company's fundamental progress carefully as it builds out its mines.

As for the technical picture, the charts shown on the following pages are strong.

Here's the daily chart showing a confirmed bullish trend higher with a wide support zone below yesterday's close. The junior mining stocks were hit particularly hard yesterday and a pullback in the group would provide an entry point in this name.

The weekly chart displays a classic up trending channel with prices stair stepping higher day by day. There was significant volume coming into the stock last week creating strong anchor bar support. By combining that anchor bar with other visually apparent anchor, one can gain a sense of just how far this stock could fall and still be quite bullish. That's the risk side of the equation.

The reward is the potential for Entree Gold to break much higher. Here's the long term chart showing the volume buildup as prices eat into the resistance zone of years past. There is nothing to stop this stock from really taking off if it eats through resistance here. This is a long-term picture though and that means that you need to work your way into a reasonable position with the idea that you can trade the name for months to come.

In trading, nothing is for sure. Given that this is an exploration play, it certainly isn't a lock. It does show all the signs that you want though to provide the confidence that it has a good shot to break higher -- appreciably higher. That's the best you can ask for and is why I have a position in the stock.

Until next time, just keep trading the charts!

At the time of publication, Little was long EGI, though positions can change at any time.

L.A. Little, author, professional trader and money manager, writes daily on www.tatoday.com, a free educational site for traders and investors. He has been featured in numerous publications and is the author of Trade Like The Little Guy.

His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.

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