Bullish Belt Hold / Opening Marubozu
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A single-candlestick pattern that appears during a downtrend. Price opens with a gap down, then the open equals the low, and buying drives the price up to form a large bullish candle. The absence of a lower shadow is characteristic, indicating that sellers were completely overwhelmed from the open. This is an early signal of a potential trend reversal.
Enter long at the open of the next candle after the belt hold is confirmed, or when price exceeds the belt hold's high.
Project 1.5 to 2 times the body length upward from the high to determine the price target. Also reference nearby resistance lines.
Place a stop-loss slightly below the low of the belt hold (which equals its open).
Increased volume during formation is important. Without volume confirmation, the probability of a false signal increases.