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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski’s Bullish Belt Hold

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Market
Industrials (^DJI):
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Nasdaq (^IXIC):
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As of 11/22/2017
23,526 -64.65 -0.3%
9,627 11.94 0.1%
758 -0.24 0.0%
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Tom's Targets    Overview: 11/14/2017
23,700 or 22,800 by 12/01/2017
9,300 or 9,800 by 12/01/2017
800 or 750 by 12/01/2017
7,000 or 6,500 by 12/01/2017
2,625 or 2,540 by 12/01/2017

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The bullish belt hold is one of the better performing candlesticks that I researched. It acts as a bullish reversal often, placing its rank at 11 out of 103 (where 1 is best) and it occurs frequently in nature (ranking 22). Overall performance is well back of the pack, though: 62. That is because the return over 10 days is lousy when compared to other candle patterns.

Important Results for Bullish Belt Hold

Theoretical performance: Bullish reversal
Tested performance: Bullish reversal 71% of the time
Frequency rank: 22
Overall performance rank: 62
Best percentage meeting price target: 74% (bull market, up breakout)
Best average move in 10 days: -5.2% (bear market, down breakout)
Best 10-day performance rank: 28 (bear market, down breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal bullish belt hold candlestick
Bullish Belt Hold

Bullish Belt Hold Discussion

As the important results show (see above), the candle functions well as a bullish reversal in practice as well as in theory. The frequency rank is 22, meaning the candle occurs often, so it is easy to find in a historical price series. The overall performance is mid list, 62, and that is because of the comparatively poor performance over the 10 day measurement period.

The post breakout trend in a bull market after an upward breakout results in the best percentage meeting the price target (which is the candle height projected upward or downward, depending on the breakout direction). The average move 10 days after the breakout is not exceptional at -5.2%, meaning price drops. The best performance over the 10-day measurement period occurs in a bear market after a downward breakout. The candle ranks 28 out of 103 candles, where 1 is best.

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Bullish Belt Hold Identification Guidelines

CharacteristicDiscussion
Number of candle linesOne.
Price trend leading to the patternDownward.
ConfigurationLook for a white candle with no lower shadow, but closing near the high.

Three Trading Tidbits for Bullish Belt Hold

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. Bullish belt hold candles that appear within a third of the yearly low perform best -- page 130.
  2. Belt hold candles taller than the median have post breakout performance significantly better than those shorter than the median -- page 131.
  3. Belt holds with comparatively tall upper shadows outperform -- page 131.

Bullish Belt Hold Example

The bullish belt hold candlestick on the daily scale

The chart shows three bullish belt hold candlesticks on the daily scale. Candle A has a small upper shadow and the candle acts as a reversal of the uptrend but fails. Since price closes below the belt hold’s low, the breakout is downward, resuming the downtrend already underway.

Candle B also acts as a continuation because price enters the candle from below and exits out the top, resuming the uptrend that began on the prior candle.

Belt hold C appears just after a minor low, but this bullish belt hold acts as a reversal. The candles leading to C show price falling. At C, the stock begins posting higher closes, moving price up. The down to up movement surrounding the bullish belt hold qualifies this belt hold as a reversal.

The difference between belt hold A and C is that C has an upward breakout but A breaks out downward. Both have price trends leading downward into the candle.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. The last time politics and religion were mixed, people were burned at the stake.