Diamond top
A shape that first widens and then narrows, with the outline of a diamond, after a rise.
What it shows
A diamond has swings that grow larger, then smaller. The upper and lower boundaries each form a V and an inverted V. It usually appears near a high, when price is busy.
It is rare, so we are strict about the shape: the left half must widen and the right half must narrow.
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 a rising and a falling line to the left half and the opposite pair to the right half.
- Require the left half to widen and the right half to narrow, meeting at left and right points.
- 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 down | Closed below the lower boundary. |
| Broken up | Closed above the upper 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 an all-time high or a recent high.
Limits
- Rare, hard to recognize in real time.
- Easy to draw on random data.
- Often confused with a head and shoulders.
Try it in forecastviz
- Open any ticker and choose Reversal patterns → Diamond top in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Diamond bottom and Head and shoulders on the same chart.
Questions
Is it rare?
Yes, compared with most patterns.
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.