Novagold Resources (NG) has been coming across the ticker tape very often in the recent months. It is currently forming a symmetrical triangle, which gives us a clue that something is going to happen, but we have no clue what.
Now I hate indecisiveness, so I go to my other two analysis tools to get an idea of what direction the price is going to break out in.
First, understand the earnings. NG has had a constant negative earnings growth for the past several quarters. This is one of the main criteria in determining the fundamental strength of a company. This, therefore, favors a breakout to the downside.
Now, look at the point and figure chart. There is a very, very reliable pattern called a "catapult" that already broke out to the downside. If we had been looking at this chart, we would have opened up a short position long ago.
The evidence says that a downside breakout is very probable, so be prepared to open a short sale. The strategy and all of my analysis for trading this is outlined in this video below. I will be entering my position as soon as a breakout is confirmed. I believe the breakout will occur tomorrow morning.
Any questions are welcome as usual, and congratulations to those who entered GRMN with me this morning at the low of the day!
Happy trading,
~Christopher Diodato
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