Silver's bullish cup and handle patterns

Bullish investors drink from cup and handle patterns. We recently highlighted these bullish setups for silver futures and the iShares Silver Trust (SLV) in this blog. The metal continues to trace out bullish formations that support both tactical and longer-term upside potential.

Silver futures are attempting to break out from its mid October into late November bullish cup and handle pattern that would favor additional tactical upside to 62 (Chart 1). In addition, a solid close to end November would reinforce the breakout from the "mother of all cup and handle patterns," a 46-year big base that projects longer-term upside to 85 and 95 for silver (Chart 2).

A decisive push above 54.41-53.22 would confirm the mid October into late November bullish cup and handle and favor additional tactical upside to 62.00. Rising 13-, 26-, and 40-day moving averages from the 51.50s down to the 49.85-49.65 area reinforce the bullish tactical backdrop for silver.

On a longer-term basis, a firm November close would reinforce the breakout from the massive 46-year cup and handle. The 50–49 region represents the key breakout zone that must hold to maintain high confidence in this pattern. For risk management, the October and November lows at 46.67–45.55 serve as important downside reference points.

Chart 1: Silver futures: Daily chart with tactical cup and handle pattern

Chart 2: Silver: Monthly chart with the "mother of all cup and handle patterns"