Bullish Belt Hold Candlestick Pattern
The Bullish Belt Hold candlestick pattern is a bullish reversal candlestick pattern that near or at the end of a downtrend and signals a reverse in investor sentiment. The candlestick pattern is easily identified due to its lack of a lower shadow.
When a Bullish Belt Hold candlestick develops, it means that buyers have had control of the share price for the entire trading session as the share price never got lower than its opening share price.
Since the trading session open, the share price has only pushed higher and that’s why there is no lower shadow for a Bullish Belt Hold candlestick pattern. The buyers have been in control for the entire trading session.
Taken alone, the Bullish Belt Hold candlestick is not the most reliable of trend reversal signals. However, when it is combined with another bullish reversal candlestick pattern, like a Piercing candlestick pattern, the likelihood that the downtrend is over and an uptrend will resume is increased.
Requirements
Listed below are the requirements for a Bullish Belt Hold candlestick pattern.
- It can be either a bullish reversal candlestick pattern or part of a bullish continuation candlestick pattern
- It has a shaven bottom, meaning it has no lower shadow or the lower shadow is minuscule in nature
- The share price should close at or near the highs for the trading session
- Most have green colored real bodies, however in certain instances a Bullish Belt Hold candlestick could have a red colored real body
Characteristics & Observations
Listed below are some of the characteristics of Bullish Belt Hold candlestick patterns, as well as some of my observations I have noticed with the pattern over the years.[s2If !current_user_can(access_s2member_level1)]…..
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- The larger the real body is for the Bullish Belt Hold candlestick, the greater the chances are that there has been a change in the stock’s trend
- When there is a lot of buying volume associated with the Bullish Belt Hold candlestick, the candlestick’s support area will be very strong and typically offers an opportunity for a scale-in purchase
- The first of three candlesticks in a 3 White Soldiers candlestick pattern tends to be a Bullish Belt Hold candlestick pattern
Bearish Counter-Part
The bearish counterpart to the Bullish Belt Hold candlestick pattern is the Bearish Belt Hold candlestick pattern.
The main difference between Bullish and Bearish Belt Hold candlestick patterns is where the develop in a stock’s trend. Bullish Belt Hold candlesticks tend to develop at the bottom of downtrends whereas Bearish Belt Hold candlesticks tend to develop at the top of uptrends.
The other significant difference between Bullish Belt Hold and Bearish Belt Hold candlesticks is that a Bullish Belt Hold candlesticks do not have lower shadows on their candlesticks whereas Bearish Belt Hold candlesticks do not have upper shadows.
Support Area
The support area for a Bullish Belt Hold candlestick is the low from the candlestick. Bullish Belt Hold candlestick patterns that have large real bodies tend to act as better support areas than Bullish Belt Hold candlestick patterns that have small real bodies.
A close below the support area for a Bullish Belt Hold candlestick pattern nullifies the candlestick’s support. Breaking a support area tends to lead to a rapid decrease in share price.
Trading Strategies
Rather than selling on the first break below a support area, sometimes it pays to monitor the situation and continue holding the shares rather than selling the shares right away. Temporary breaks below support areas with the intent of fooling investors are known as Bear Traps. In the below chart for BlackRock, there was a break below the support area from the Bullish Belthold candlestick pattern, however the candlestick did not close below the support area. It was just an intra-day break to see if there were any sellers in the stock left.
Bear Traps give the false impression that the stock’s share price is going to continue heading lower and then a quick and unexpected turn-around in the share price happens. Price gains tend to be fast in order to catch the sellers (bears) out of position. Being able to spot a Bear Trap can lead to significant profits! That is exactly what happened for BlackRock (BLK).
Real Chart Examples
BlackRock (BLK), a financial services advisory firm, formed a Bullish Belt Hold candlestick pattern that I illustrate on this next 3 month daily candlestick chart. This particular Bullish Belt Hold candlestick developed at the beginning stages of an uptrend.
This Bullish Belt Hold candlestick was also part of another bullish candlestick, a Rising Window candlestick pattern, also known as a gap-up. The support area created by the Rising Window candlestick served as an entry point where a scale-in purchase could have been made to jump on BLK’s new uptrend.
A Bullish Belt Hold Candlestick Pattern Developed at the Beginning of a Potential New Uptrend for BlackRock (BLK)
If the market sees any sort of continued consolidation period after the Trump rally starts to fade, a pullback to the support area from the Bullish Belthold candlestick pattern could provide for a less risky entry into a position with BlackRock (BLK). In an era of rising interest rates, having a portion of your portfolio in the financial services sector just makes sense.
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