Shares of NovaGold Resources (NG) have already doubled in price this year, and they could double again in the months ahead, as a new bull market in the precious metals is underway -- and is in the early innings of its advance, in my opinion.
The bulls have everything right in this daily chart of NG, above. Prices are above both the rising, 50-day and the rising, 200-day moving averages. The daily On-Balance-Volume (OBV) line has been rising steadily since November, and tells us that buyers of NG have been more aggressive with heavier volume on days when NG has closed higher.
The 12-day price momentum study is not diverging from the price action. While many market observers would say that the rally in NG is overbought, it is actually a sign of strength when an overbought market keeps rising. As prices have rallied, it has not been straight up -- there have been pauses and consolidations along the way.
It is not often that we use a 10-year weekly chart to show what we want, but that is what we need to focus on today. NG is above the rising 40-week moving average line so we know the longer-term trend is positive.
The weekly OBV line turned up in early 2015, indicating that buyers of NG have been accumulating shares for the past 18 months. This makes the bull story very compelling. The MACD oscillator is in a bullish configuration above the zero line. While there is some resistance around $10 on this chart, the 2011 high around $14 is our longer-term upside target.
