NovaGold Resources Inc. stayed in a long-term down-trend for more than two years, below its falling 40-week moving average (40wMA) and below a falling trend-line (solid line). It then rallied above these and settled in a rising trading pattern indicating increasing demand but steady supply at around $5.20 (dashed lines).
The recent rise above the top of this formation (A) signalled a surge in investor demand and the start of a new up-leg. Behaviour indicators including the rising 40wMA confirm the bullish status. Only a decline below $5 would be negative. Measurements provide an initial target of $7. Higher targets are visible.
Monica Rizk is the senior technical analyst and Ron Meisels is the president of Phases & Cycles Inc. and he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com.