NovaGold Resources Nearing Key Breakout Level

Shares of NovaGold Resources (NYSE: NG) are rising this morning; currently, shares are higher by 4.11%, trading at $10.64. NG hit an intra-day high of $10.69 before pulling back slightly.

NovaGold Resources has been consolidating sideways for the past two and a half months, solidly confirming that $9.00 is major support for the stock. Shares have since risen and are now testing the top of that range; for a breakout to be confirmed, shares have to rise above and hold $10.73.

If NovaGold Resources can break that level, the $11.50 resistance level comes into play followed by $12.00 and $13.47. Given that NG has also regained the 20-day and 50-day moving averages, bullish momentum is expected to continue.

It is best to play this through long shares with a tight stop at the 20-day moving average. Options traders could also consider buying the Dec2011 $11/13 call spread for $0.70.

Note that NovaGold Resources has 6.22% short interest.

NovaGold Resources Inc. is a precious metals company engaged in the exploration and development of mineral properties situated principally in Alaska, the United States of America and British Columbia, Canada.