Thanks to the resurgence in the precious metals market, New Gold Inc (NYSEAMERICAN: NGD) is back to building on its blistering run. On a year-to-date basis, NGD stock has gained about 266%. Over the trailing five sessions, the security is up more than 10%, thereby showing little signs of buyer exhaustion. Indeed, a rare quantitative signal that flashed in New Gold's price chart indicates that even more upside is possible.

Adding to the enthusiasm, New Gold is scheduled to release its earnings report on Feb. 18. In other words, the bullish thesis revolves around two factors: first, a positive print and outlook could easily boost NGD stock, which is already primed for robust kinetic swings. Second, the record-breaking rally of both gold and silver has resumed after a consolidatory lull. That may help ignite sentiment throughout the early part of the new year.

Of course, the bullishness toward NGD stock is complicated by a not-so-insignificant detail. In November, Coeur Mining, Inc. (NYSE:CDE) announced that it would acquire New Gold in an all-stock transaction valued at approximately $7 billion. It should be noted that the exchange ratio values NGD at $8.51 per share. Therefore, the current price represents roughly an 8% premium over implied value.

To be sure, some investors might view this as too rich a premium ahead of the anticipated closure of the deal, which may occur in the first half of next year, pending shareholder, court and regulatory approvals. However, what's important to keep in mind is implied volatility (IV). As a residual value backed out from actual traded prices, which themselves stem from real money order flows, IV offers a big clue to the expected dispersion of the target security.

For the February earnings disclosure, expected move calculators are anticipating a 19.1% move in either direction for NGD stock. Now, we ...