Stock trading is a complicated business that involves in-depth knowledge of several essential practices and parameters. Most investors consider factors like their risk appetites, investment goals and horizons before investing. However, professionals traders deep-dive into various types of charts and analytical guides – one of which is known as a candlestick chart. Candlestick charts are primarily technical tools that build patterns predicting price direction of stocks. As a trading expert will tell you, there are various types of candlestick patterns, one of which is the Bullish Belt Hold Candlestick Pattern. Here’s an introductory guide on bullish belt hold patterns.
Bullish Belt Hold Definition and Meaning
Also referred to as Yorikiri in Japanese, the Bullish Belt Hold Pattern is defined as a single bar Japanese candlestick pattern, which suggests a potential reversal of a prevailing downtrend. In this candlestick pattern, a trading day opens at its lowest level, but as the day progresses, the stock begins to move up, eventually closing near a high. That said, it is not necessary that the trading day would close at its highest point.
A detailed explanation of the Bullish Belt Hold Pattern
The Bullish Belt Hold candle appears similar to a white opening Marubozu. The pattern of the candle is such that it opens at the low of a period and then rallies to close near a high, leaving a tiny upper shadow and no lower shadow. This pattern resurfaces again in a downtrend, following a stretch of bearish candlesticks. Also, the opening price of the candle is considerably lower than the low of the previous day. The pattern is named the “belt hold” since it closes well into the previous candle’s body and holds the price from falling further.
Characteristics of the Bullish Belt Hold Pattern
There are three defining characteristics of the Bullish Belt Hold Candlestick Pattern. They are as under:
1. The Bullish Belt Hold Pattern typically signals a shift or transference in investor opinions, from bearish to bullish.
2. Since this pattern frequently occurs, it shows a mixed bag of results when it comes to predicting the future price of a stock.
3. The candlestick’s potency is boosted in case it forms around a support level, which includes moving averages, trend lines or market pivot points.
Predicting trends about bullish candlestick patterns
As a trader, you must consider more than two days of trades while predicting trends. Although you can find the Bullish Belt Hold across various time-frames, you should remember that it is a lot more reliable on daily and weekly charts. This is attributed to the fact that traders play an integral role in its formation.
Now that you know what is Bullish Belt Hold, you can begin trading. Also, you should avoid trading the bullish hold in isolation. If you need trading advice, you can reach out to us at Angel One. Our team of qualified professionals can lend their expertise, thus enabling you to make informed investment decisions.