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Bullish Belt Hold

A bullish belt hold is a single-day candlestick pattern that may signal a reversal from a downtrend to an uptrend. It forms when the open is lower than the previous close, but the stock price rises throughout the day, closing near the high with a short upper shadow and no lower shadow. While easy to identify, bullish belt holds have low reliability in predicting future price moves. Confirmation of the reversal is needed through additional price action or technical indicators.

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151 views3 pages

Bullish Belt Hold

A bullish belt hold is a single-day candlestick pattern that may signal a reversal from a downtrend to an uptrend. It forms when the open is lower than the previous close, but the stock price rises throughout the day, closing near the high with a short upper shadow and no lower shadow. While easy to identify, bullish belt holds have low reliability in predicting future price moves. Confirmation of the reversal is needed through additional price action or technical indicators.

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tayyabamin4141
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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8.

Bullish Belt Hold

Definition:
A bullish belt hold is a single-day Japanese candlestick pattern that suggests a
possible reversal of the prevailing downtrend.

The pattern forms when, following a stretch of bearish trades, a bullish or white
candlestick occurs. The opening price, which becomes the low for the day, is lower
than the close of the previous day. The stock price then rises throughout the day,
resulting in a long white candlestick with a short upper shadow and no lower shadow.

Trend: Reversal
Expected trend: Bullish
Previous trend: Bearish
Reliability: Low
Type: Bullish
Number: 1
Construction:

 white body
 no lower shadow
 short upper shadow
 appears as a long line

KEY TAKEAWAYS:

 A bullish belt hold is a pattern that can signal a reversal in investor sentiment
from bearish to bullish.
 Bullish belt holds are easy to spot, but the signals must be confirmed. Its
reliability is enhanced if it forms near a support level.
 The bullish belt hold can be found across all time frames but is most useful in
daily and weekly charts.

Understanding a Bullish Belt Hold

 The candle, similar in appearance to a white Marubozu, opens at the low of the
period and subsequently rallies to close near its high, leaving a small shadow at
the top of the candle. The pattern surfaces after a stretch of bearish candlesticks in
a downtrend. The candle’s opening price is significantly lower than the previous
day’s low. The pattern closes well into the body of the previous candle, holding
price from falling further, hence the name "belt hold."

 The bullish belt hold, known as yorikiri in Japanese, often signals a shift in
investor sentiment from bearish to bullish. This candlestick pattern occurs
frequently and shows mixed results in predicting a security’s future price. The
potency of the candlestick is enhanced if it forms near a support level, such as a
trend line, a moving average, or at market pivot points.

 As with any other candlestick charting pattern, traders should consider more than
just two days of trading when making predictions about trends. The bullish belt
hold can be found across all time-frames but is more reliable on the daily and
weekly charts as more traders are involved in its formation.

Trading the Bullish Belt Hold:

 Like most Japanese candlestick patterns, traders should not trade the bullish belt
hold in isolation. Using other technical indicators and price patterns greatly
increases the probability of a valid signal.

 For example, the bullish belt hold may open below a previous swing low and
close back above that point to form a potential double bottom. The bullish belt
hold should be a long white (or green) candlestick to indicate that the bulls have
taken back control. Ideally, the candle preceding the pattern should be
accompanied by above-average volume to indicate climatic selling and a possible
reversal to the upside.
 IMPORTAN NOTE :

 The bullish belt hold is not considered very reliable as it is often incorrect in
predicting future share prices.upside.

 On occasions, the bullish belt hold can be a mere pause in the overall downtrend,
therefore, it is prudent that traders wait for the price to confirm the pattern. An
entry should only be taken when the price trades above the high of the belt hold
candlestick.

 Conservative traders may want to wait for a close above the high of the pattern. If
the bullish belt hold candlestick is long, traders could place a stop-loss order at its
midpoint. Alternatively, traders could set a stop below the pattern. Although this
requires a wider stop, there is less chance of market noise interfering with the
trade.

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