This is a bullish reversal pattern consisting of only a single white candlestick with an open bozu and a very small wick. It is also possible to have a white marubozu for this single candlestick though marubozu or with a wick this is typically considered a low credibility setup. In ‘Japanese Candlestick Charting Techniques‘ Steve Nison cites a sumo wrestling maneuver yorikiri where the enemy is driven out of the ring while keeping hold on the belt of the other wrestler. Among his examples in the said book Nison also refers at engulfing patterns as a Belt Hold if there is an open bozu.
Technical Description
1) The preceding trend must be bearish.
2) There is a bearish gap at the open of the candlestick which in turn becomes the low for the period.
3) From the open-low price action for the period turns bullish eventually closing near its highs with a very small wick, possibly none.
Mark’s Perspective
The bigger the body of the pattern the greater the probability of a bull market developing though ‘Belt Hold’ patterns more often leads to a correction than a full reversal. When trading a confirmation is necessary buy only if the latest candlestick opened with an upside gap, or is a white candlestick with a higher close. Stops must be placed below the pattern’s low.