Diamond bottom
A shape that first widens and then narrows, with the outline of a diamond, after a fall.
Reversal patternsBest on 6M, 1Y, 3YAlso called inverse diamond
What it shows
A diamond bottom has the same shape as a diamond top but forms after a decline. Swings grow larger, then smaller.
It is rare, so we are strict about the shape.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find swing highs and lows over a window of at least 30 bars.
- Fit lines to the left half (widening) and the right half (narrowing).
- Require both halves to match the shape.
- Mark the pattern complete when a close leaves the diamond.
Starting values: Minimum bars 30; Touches per boundary 2. These are proposed and will be tuned on real price data before launch.
How to read it
- Red lines are the upper boundaries. Teal lines are the lower boundaries.
- The widest point is in the middle.
- The gold dot shows where price left the diamond.
Status labels you may see
| Label | What it means |
|---|---|
| Forming | Shape found, price inside. |
| Broken up | Closed above the upper boundary. |
| Broken down | Closed below the lower boundary. |
What cancels it
A close beyond the opposite boundary before the shape completes.
What traders check next
- Volume through the shape.
- Which boundary price left from.
- Whether it is near a recent low.
Limits
- Rare.
- Easy to draw on random data.
- Often confused with an inverse head and shoulders.
Try it in forecastviz
- Open any ticker and choose Reversal patterns → Diamond bottom in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Diamond top and Inverse head and shoulders on the same chart.
Questions
Is it the mirror of a diamond top?
Yes, after a fall instead of a rise.
Why diamond?
The outline looks like the shape.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- Murphy, Technical Analysis of the Financial Markets
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.