As of 11/26/2025
Indus: 47,427 +314.67 +0.7%
Trans: 16,531 +129.97 +0.8%
Utils: 1,121 +14.81 +1.3%
Nasdaq: 23,215 +189.10 +0.8%
S&P 500: 6,813 +46.73 +0.7%
|
YTD
+11.5%
+4.0%
+14.1%
+20.2%
+15.8%
|
 47,800 or 45,000 by 12/01/202517,400 or 15,800 by 12/15/20251,150 or 1,090 by 12/01/202524,000 or 21,800 by 12/01/20257,000 or 6,500 by 12/01/2025 |
As of 11/26/2025
Indus: 47,427 +314.67 +0.7%
Trans: 16,531 +129.97 +0.8%
Utils: 1,121 +14.81 +1.3%
Nasdaq: 23,215 +189.10 +0.8%
S&P 500: 6,813 +46.73 +0.7%
|
YTD
+11.5%
+4.0%
+14.1%
+20.2%
+15.8%
| |
|
47,800 or 45,000 by 12/01/202517,400 or 15,800 by 12/15/20251,150 or 1,090 by 12/01/202524,000 or 21,800 by 12/01/20257,000 or 6,500 by 12/01/2025 | ||
For more information on this pattern, read Encyclopedia of Chart Patterns, 3rd Edition (#ad).
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Updated and added 10 examples on 7/31/25.
Diamonds are as tough to spot as night crawlers in the grass on a summer night. Most often, you'll find diamond bottoms in a bull market with an upward breakout. A redeeming quality of diamond bottoms is that a quick rise sometimes follows a quick decline. The small figure of a diamond bottom shows an example of this behavior.
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Diamond Bottom
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The above numbers are based on 477 perfect trades. See the glossary for definitions.
| Characteristic | Discussion |
| Price trend | Downward leading to the pattern. |
| Shape | Looks like a diamond, but often tilted to the side. |
| Trendlines | Prices form higher peaks and lower valleys (a broadening pattern) in the first part of the pattern, then price action narrows with lower peaks and higher valleys (a symmetrical triangle). Trendlines outline many of the peaks and valleys, forming a diamond shape. |
| Touches | Prices will touch each trendline once or twice. Don't worry if your lines cross some of the price outliers. |
| Volume trend | Downward trend 67% of the time. |
| Breakout | Upward 74% of the time, when price closes outside one of the trendline boundaries. |
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Consult the associated figure on the right.
| Trading Tactic | Explanation |
The Measure Rule
Price Trend
Half Staff
|
| Measure rule | See the measure rule figure to the right. Compute the height from the highest peak (A) to the lowest valley (B) in the pattern and then multiply it by the above 'percentage meeting price target.' Add it (upward breakouts) or subtract it (downward breakouts) from the breakout price (blue line) to get the price target (C). | |
| Price trend | See the price trend figure to the right. If price makes a quick, nearly vertical drop (A) leading to the diamond and the breakout is upward, expect price to recover back to (often falling just short of the launch price) the price at which it started the plunge (B). Also, price must have something to reverse. Diamonds with short-term (less than three months) or intermediate-term (three to six months) price trends leading to the diamond perform best, depending on market condition and breakout direction. | |
| Half staff | See the half staff figure to the right. If the diamond acts as a continuation pattern, meaning that price exits (C to D in the same direction as it entered the pattern (A to B), then the diamond can act as a half-staff pattern (half the move is still ahead). The move after the breakout (CD) will often fall short, so look for overhead resistance or underlying support where price might stall. | |
| Price velocity | High velocity moves after the pattern often follow high velocity moves leading to the pattern. | |
| Yearly low, middle | For best performance, avoid diamonds with breakouts near the yearly high. | |
| Volume trend | A falling volume trend for upward breakouts results in the best post breakout performance. | |
| Throwbacks and pullbacks | Throwbacks and pullbacks hurt post breakout performance. |
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The above figure shows an example of a diamond bottom chart pattern. Many times the diamond chart pattern is skewed or pushed to one side, making diamonds difficult to spot. In this example, outliers A and B hide the diamond shape.
Notice that price at D tries to climb back to the launch point C but does not quite make it. That is typical behavior so plan accordingly when you trade. This diamond bottom also shows a U-shaped volume pattern.
The following is a slide show. Click the right or left arrows, or the circles below the chart to navigate around the slides.
This is a classic example of a diamond bottom on the daily scale.
This diamond bottom isn't as well-shaped as the prior example (because of white space) so that it looks like an unconfirmed double bottom.
Another diamond bottom example. It's rare that the trendlines connecting the peaks and valleys will look like a diamond. They often appear more like a square tilted to the side.
This diamond bottom has a throwback that completes a A.
Another diamond bottom.
Another diamond bottom.
This diamond bottom breaks out upward at A and throws back to B.
Another diamond bottom.
This diamond bottom doesn't have much of a drop from A, nor a large drop to B. The two seem to mirror themselves.
The launch price for the drop is at A. Price reverses the downward trend at the diamond and returns to the launch price at B. You can find this behavior sometimes, but it's rare. Even so, using A can make for an easy target, B (to reach or almost return to the price of A).
-- Thomas Bulkowski
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