Patience Is a Virtue
The bullish belt is part of a larger family of stock chart patterns called candlesticks. These are usually the easiest charts for a beginner to understand, because they use the same shapes, colors, and signals, to indicate a lot of data about the movement of the market that day. When you become more familiar with looking at these chart signals, you’ll start to notice patterns among the candlesticks, and you’ll be able to interpret them with just a glance.
If you’re interested in being able to spot this pattern in your own charts, you should know that it usually occurs during a negatively sloped movement. Look for it to appear after you’ve been treated to a long stretch of bearish candlesticks. It will begin with a white candlestick that opens significantly lower than its eventually closing price for today. This means that a long white candlestick will form with no lower shadow.
Remember when we were talking about the virtue of patience in the stock market. It’s very important to remember that you should never make a purchase or sale of a stock based on just two days of analysis. The bullish belt is called a hold, because to the untrained eye it would seem to indicate that the former downtrend was ending, but that’s usually not true. You can spot this signal when a white candlestick follow a black one, but with a much lower opening price that the previous day. Normally, this would seem to indicate a bullish trend was starting, but it’s always important to wait for that third day.