Silver futures attempt a tactical breakout

We flagged that silver futures were defending support within a tactical uptrend defined by rising 26- and 40-day moving averages (DMAs) in this blog on October 29. This pattern has continued to develop with the potential for a tactical base solidified by a bullish hammer (Oct 28) and a bullish engulfing pattern (Nov 4 and Nov 5). So, what's next?

Silver futures: Rally above 48.74-49.23 needed confirm tactical base for 52.40

The big tactical question: Will a bullish hammer (Oct 28) and a bullish engulfing pattern (Nov 4 and Nov 5) confirm a successful test of the rising 40-day moving average (DMA) ahead of renewed upside for silver?

The immediate key for silver is a decisive rally above 48.74 (rising 26-DMA) and 49-49.23 (Oct 31 and Oct 23 peaks), which could happen today. This is required to confirm a tactical triangle base for near-term upside to 52.40 (pattern count) and potentially 53.77 (Oct 17 peak).

If today's early strength stalls, and silver does not hold its move above the 48.74 to 49.23 zone, it would expose the rising 40-DMA near 47.45 along with the bullish engulfing and bullish hammer lows at 46.52 and 45.51, respectively.

Chart 1: Silver futures: Daily chart with moving averages