A belt hold candlestick is a variety of long candle, rather like a marubozu. However, it functions not as a continuation pattern but as a reversal, and has no wick only at the open, not necessarily at the close.

A belt hold differs from an ordinary long candlestick or marubozu in that it’s defined not only by the length of the candle body, nor by whether it has a wick above or below. A belt hold is defined by its position on the chart, as well, occurring as it does at the top of an uptrend or bottom of a downtrend.

A bullish belt hold:
•    Occurs after a downtrend;
•    Forms as a long ascending (white or clear) candlestick similar to an opening white marubozu, with no lower wick although there may be a small one on the upper side;
•    Establishes a support level for near-term trading; and
•    Signals a reversal to an uptrend.

Below is an example of a bullish belt hold:

Near the bottom of a downtrend, following several trading days of indecisive, short-bodied candles, a long white, bullish belt hold forms. Note that this bullish belt hold is also a marubozu, with no wicks on either end of the candle (the open is equal to the low and the close is equal to the high).

The opening price of the bullish belt hold serves as the support level for the resulting uptrend, illustrated by the red trendline. It initiates a steep if rather jagged uptrend, regaining all the trading ground originally lost to the downtrend plus a bit.

The opposite, the bearish belt hold:
•    Occurs after an uptrend;
•    Forms as a long descending (black or red) candlestick similar to an opening black marubozu, with no upper wick but perhaps a small lower one;
•    Establishes a resistance level for near-term trading; and
•    Signals a reversal to a downtrend.

Below is an example of a bearish belt hold:

The bearish belt hold forms following the uptrend and after several days of short-bodied, indecisive candlesticks. The opening price, equal to the high of the time period’s trading, provides the resistance trendline that defines the ensuing downtrend. Again, in this example the reversal wipes out the gains made by the stock during its uptrend, plus a bit extra.

When short-term trading with belt holds, the opening price not only provides the initiation point for the resulting support or resistance trendline, it also provides the significant technical level for the ensuing trade. If a retracement following the belt hold’s formation breaks above the opening price (for a bearish belt hold) or beneath it (for a bullish one), that would invalidate the trading signal and any open positions based on that signal should be closed.

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