65-Day Academy · Day 22 · Technical Analysis
MA Ribbons & the Stacked Stack
The stack
In a strong uptrend the averages line up: price > 20 > 50 > 200, all rising, evenly spaced. That "stacked" order is the visual signature of a healthy trend. The first disorder — price slicing the 20, the 20 flattening, spacing collapsing — is the earliest mechanical evidence of trend decay, well before any cross.
Ribbons
Plotting several MAs (e.g., 8 EMAs from 20 to 100) creates a ribbon: parallel, fanned-open ribbons = strong trend; braided/tangled ribbons = range (no trade). Ribbon expansion = trend strengthening; contraction = trend ending. It turns "how healthy is this trend?" into an at-a-glance read.
What you'll practise
Price > 20 > 50 > 200, all rising, for months. Then price closes below the 20-day and the 20-day flattens. Most probable read?
20 XP in the app · intermediate
Sources
- Moving Average RibbonsInvestopedia
- Technical Analysis of the Financial MarketsJohn Murphy
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.