Japanese candlesticks - Belt hold
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Bullish belt hold line
Definition: A bullish belt hold line is a structure comprised of a single Japanese candlestick. This is a long bullish candlestick (green) has an opening price that corresponds to the lowest point on the candlestick. The opening must occur in a bearish gap.
Illustration:
Characteristic: A bullish belt hold line is often formed after a significant drop characterized by several large red Japanese candlesticks.
Significance: A bullish belt hold line is a reversal pattern, it indicates a bullish trend reversal. This reflects a massive profit taking following a bearish gap. Taking advantage of this opportunity, buyers rouse and fuel the trend reversal.
Note: It is very important that the opening price corresponds to the lowest point on the candlestick.
Invalidation: If the next candlestick is not bullish or does not open on a bullish gap, the bullish belt hold line structure is invalidated.
Bearish belt hold line
Definition: A bearish belt hold line is a structure comprised of a single Japanese candlestick. This is a long bearish candlestick (red) has an opening price that corresponds to the highest point on the candlestick. The opening must be made in a bullish gap.
Illustration:
Characteristic: A bearish belt hold line is often formed after a significant increase characterized by several large green Japanese candlesticks.
Significance: A bearish belt hold line is a reversal pattern, it indicates a reversal of the bearish trend. This reflects a massive profit taking following a bullish gap. Taking advantage of this opportunity, sellers rouse and fuel the trend reversal.
Note: It is very important that the opening price corresponds to the highest point of the candlestick.
Invalidation: If the next candlestick is not bearish or does not open on a bearish gap, the bearish belt hold line is invalidated.
