Bullish Belt Hold
What Is a Bullish Belt Hold?
A bullish belt hold is a single-day Japanese candlestick pattern that proposes a potential reversal of the predominant downtrend.
The pattern forms while, following a stretch of bearish trades, a bullish or white candlestick happens. The opening price, which turns into the low for the afternoon, is lower than the close of the previous day. The stock price then, at that point, ascends over the course of the day, bringing about a long white candlestick with a short upper shadow and no lower shadow.
It very well may be diverged from a bearish belt hold.
Understanding a Bullish Belt Hold
The candle, comparative in appearance to a white Marubozu, opens at the low of the period and in this manner rallies to close approach its high, leaving a small shadow at the highest point of the candle. The pattern surfaces after a stretch of bearish candlesticks in a downtrend. The candle's opening price is altogether lower than the previous day's low. The pattern closes into the body of the previous candle, holding price from falling further, subsequently the name "belt hold."
The bullish belt hold, known as yorikiri in Japanese, frequently signals a shift in investor sentiment from bearish to bullish. This candlestick pattern happens often and shows mixed brings about foreseeing a security's future price. The strength of the candlestick is enhanced on the off chance that it forms close to a support level, for example, a trend line, a moving average, or at market pivot points.
Likewise with some other candlestick charting pattern, traders ought to think about something beyond two days of trading while making forecasts about trends. The bullish belt hold can be found across all time spans yet is more dependable on the daily and week by week charts as additional traders are engaged with its formation.
Trading the Bullish Belt Hold
Like most Japanese candlestick patterns, traders shouldn't trade the bullish belt hold in detachment. Utilizing other technical indicators and price patterns incredibly expands the likelihood of a substantial signal.
For instance, the bullish belt hold might open below a previous swing low and close back over that point to form a potential double bottom. The bullish belt hold ought to be a long white (or green) candlestick to show that the bulls have assumed back command. Preferably, the candle going before the pattern ought to be joined by better than expected volume to demonstrate climatic selling and a potential reversal to the upside.
The bullish belt hold isn't viewed as entirely dependable as it is considered normal wrong in anticipating future share prices.
On events, the bullish belt hold can be a simple respite in the overall downtrend, in this manner, it is prudent that traders trust that the price will affirm the pattern. An entry ought to possibly be taken when the price trades over the high of the belt hold candlestick.
Conservative traders might need to sit tight for a close over the high of the pattern. On the off chance that the bullish belt hold candlestick is long, traders could place a stop-loss order at its midpoint. On the other hand, traders could set a stop below the pattern. Albeit this requires a more extensive stop, there is less chance of market noise impeding the trade.
Highlights
- A bullish belt hold is a pattern that can signal a reversal in investor sentiment from bearish to bullish.
- Bullish belt holds are not difficult to spot, however the signals must be confirmed. Its dependability is enhanced in the event that it forms close to a support level.
- The bullish belt hold can be found across all time spans however is most helpful in daily and week by week charts.
