Bullish & Bearish Signals — Reading Moving Averages

Once you add the 20, 50, and 200-day moving averages to your chart, you're looking at a real-time voting system. When all three agree on direction, the trend has conviction. When they start crossing and tangling, the stock is confused — and you should be cautious.

Here's exactly what to look for.

Bullish Signals

1. Bullish Stacking Order

The #1 thing to look for. When the 20-day is on top, 50-day in the middle, and 200-day on the bottom — all sloping upward — the stock is in a strong uptrend. Think of it like a parade: the 20 is leading and everyone's following in formation.

When you see this on your chart, the stock has strong momentum. The wider the spread between the MAs, the stronger the trend. This is the ideal setup for CALLS.

2. Golden Cross

When the 50-day crosses above the 200-day, that's a Golden Cross. This is a big deal — institutional algorithms watch for this and it often triggers buying. It's a longer-term signal that says "the medium trend just turned bullish against the big picture."

Notice how the 20-day (green) was already above both — it's the early warning. The Golden Cross just confirms what the 20 already told you. By the time you see this, the move has started, but institutions use it as a buy trigger so it often accelerates from here.

3. Price Bouncing Off a Moving Average

When price drops to the 50 or 200-day MA and bounces back up, that MA is acting like a support level. Institutions often buy at the 200-day because they see it as "fair value." If price touches it and bounces, that's a strong floor.

Each time the price touches the 200-day and bounces, it confirms that level as strong support. The more bounces, the more reliable the floor. If it eventually breaks through — that's a different story (see bearish signals below).

Bearish Signals

4. Bearish Stacking Order

The exact opposite of bullish stacking. When the 200 is on top, 50 in the middle, and 20 on the bottom — all sloping downward — the stock is in a confirmed downtrend. This is the setup for PUTS.

This is exactly what Ed was looking at on PLTR when he identified the PUT setup. The 20-day had already dropped below the 50-day — a sign that short-term sellers were in control. When all three MAs stack bearish, the trend has full conviction downward.

5. Death Cross

The opposite of a Golden Cross. When the 50-day crosses below the 200-day, that's a Death Cross. Institutions watch for this as a sell signal. It means the medium-term trend has turned negative against the long-term backdrop.

Notice how the 20-day (green) dropped below the 200 first — that was the early warning. Then the 50-day followed and confirmed with the Death Cross. By the time you see this, the bearish thesis is strong. This is where Ed's PUTS strategy comes in.

6. Price Rejected at a Moving Average

When a stock is falling and tries to rally back up to the 50 or 200-day MA but gets rejected, that MA has become resistance. The floor is now the ceiling — same concept as support & resistance, but moving with time.

Each rejection confirms the MA as a ceiling. Price tries to break through, fails, and falls harder. This is a strong signal to stay in or add to PUT positions.

The MA Squeeze — Trend Change Warning

One more critical pattern: when all three MAs start squeezing together, it means the current trend is losing steam and a reversal may be coming. Wide spread = strong trend. MAs converging = get ready for a shift.

When you see the MAs squeeze tight on your PLTR chart, it means something is about to happen. The stock will either break out in the direction of the prevailing trend — or reverse. This is when you watch the Go Maz signals closely for confirmation.

Quick Reference — Your MA Checklist