From a big picture pattern perspective, all of the action in the iShares Silver Trust (SLV) off of the major April high at 48.32 has carved out a base-like "cup" formation from early May to late July, which has been followed by a correction that has taken the shape of a "handle."

The composite picture produces a "cup-and-handle" intermediate-term bottom formation, which should propel silver prices -- and the SLV -- considering higher in the upcoming days and weeks.

The first significant challenge to such a rally will be a confrontation with that April-Aug resistance line, now at 40.30. As long as the integrity of the "handle" remains intact at 38.90/80, I would want to be long the SLV.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.