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To evaluate the performance of the pattern in your stock exchange within the context of other global markets, please refer to the table below. Locate your stock market to see its ranking among others. This will provide insights into the pattern’s strength and reliability, aiding you in your buying and selling decisions.
BULLISH BELT HOLD
Definition
The Bullish Belt Hold is a single candlestick pattern, essentially a White Opening Marubozu, that occurs in a downtrend. It opens at the day’s low and then rallies against the overall market trend, eventually closing near the day’s high, leaving a small shadow on top of the candlestick. Longer bodies in the Belt Hold pattern indicate stronger resistance against the trend.
Recognition Criteria
1. The market is characterized by a prevailing downtrend.
2. The market gaps down and opens at its low, and closes near to the high of the day.
3. A long white body that has no lower shadow (a White Opening Marubozu) is observed.
Pattern Requirements and Flexibility
A White Opening Marubozu or a White Marubozu (with no upper or lower shadow) should be seen in a Bullish Belt Hold, and it should open lower than the two preceding black candlesticks.
Trader’s Behavior
The market opens lower with a significant gap, indicating a continuation of the prevailing downtrend. However, following the opening, the market swiftly reverses direction. This shift causes concern among short traders, leading to the covering of many positions, which could reverse the trend and initiate a rally for the bulls.
Buy/Stop-Loss Levels
The confirmation level is defined as the last close. Prices should cross above this level for confirmation.
The stop loss level is defined as the last low. Following the BUY, if prices decline instead of rising, and close or make two consecutive daily lows below the stop loss level, while no bearish pattern is detected, then the stop loss is triggered.