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

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