International Tower Hill Mines

One name that's quickly moving within range of triggering a major breakout trade is International Tower Hill Mines ( THM), which controls a 100% interest in the Livengood gold project near Fairbanks, Alaska, which ranks among the top 2% in deposit size of recent gold discoveries. This stock has been downtrending so far in 2012, with shares off by 54%.

If you look at the chart for International Tower Hill Mines, you'll notice that this stock has been downtrending badly for the last three months, with shares dropping from a high of $3.25 to its recent low of $1.98 a share. During that downtrend, shares of THM have been mostly making lower highs and lower lows, which is bearish technical price action. That said, the stock has started to bounce strongly off that $1.98 low and quickly move within range of triggering a major breakout trade.

Market players should now look for long-biased trades in THM once it manages to break out above its 50-day moving average of $2.30 and then once it takes out more overhead resistance levels at $2.42 to $2.43 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 230,737 shares. If that breakout hits soon, then THM will set up to re-test or possibly take its next major overhead resistance levels at $2.81 to its 200-day moving average at $3.02 a share. Any high-volume move above $3.02 a share will then put $3.20 to $3.25 into focus for shares of THM.

Traders can look to buy THM off any weakness to anticipate that breakout and simply use a stop that sits right below its near-term low of $1.98 a share. One can also buy off strength once THM clears those breakout levels with volume and then use a stop that sits right below its 50-day at $2.30 a share or near $2.20 a share.

If you liked this article you might like

The Deal: Blackstone Clinches $625M Pactera Deal

Pactera Technology International Ltd Stock Upgraded (PACT)

Friday's Asia ADR Recap

Friday's Asia ADR Recap

Thursday's Asia ADR Recap

Thursday's Asia ADR Recap