Belt hold as a long signal

Figure 6-21 is a chart of Wal-Mart stock. The long belt hold pattern actually shows up on the chart on the day after Christmas in 2006. I like this chart because in addition to this being the company's most important time of year, it shows how sentiment changed relative to the retailing environment right after the crucial holiday season had ended.

Two factors contribute to the strength of this long belt hold.

1 The sheer length of the candlestick: Very aggressive buying is exhibited by the size of the candle and overall candlestick.

1 The fact that the gap from the opening price was filled: Also, you can find another bullish indication in the fact that that the stock gapped lower than the previous low on the open (it means that the price attracted buy interest immediately). Notice that the whole price action of the previous day was covered. That's bullish stuff.

Figure 6-21:

Chart of a long belt hold in Wal-Mart stock.

Figure 6-21:

Chart of a long belt hold in Wal-Mart stock.

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