If you've established through context that it's a daydream, I see no reason why that wouldn't work. A phrase or two should be enough - I can't see why you'd need further signposts. And easy to segue out of - he stirred, shook his head to clear it, hearing the day to day sounds of the outside world drift in.
I'll hear that constructive criticism. I've been trying ween off the italics a little, just that it's so easy. I really do rely on it as a quick fix for the occasional word with spoken emphasis(instead of using fully capitalized word for it. and the occasional easy quick thought. Not that I do it consistently, I tend to rely on more narrative word use, but sometimes it's just easier to just say it direct with less word usage. There's also a part of the story in one of the later chapters(not the first four) where telepathic conversations happen and I definitely use italics for that since the words are technically a thought.
The move is called the Struggle Stroker.
