Reversal pattern · bullish bias
Diamond Bottom pattern
A diamond bottom forms after a downtrend when swings first widen and then narrow, outlining a diamond. A breakout from the upper right edge completes the reversal.
How to identify a diamond bottom
- A prior downtrend.
- Swings widen, then narrow, outlining a diamond.
- The final swings compress near the middle of the structure.
What confirms it
A close above the upper right boundary of the diamond.
What invalidates it
A close below the lower right boundary.
How traders project a target
Project the diamond's widest height upward from the breakout point.
Common mistakes
- Labelling ordinary bases as diamonds.
- Trading before the breakout from the right side.
- Using too few swings to define the outline.
Where it appears
Rare, and most often seen after sharp, volatile declines.
Frequently asked questions
Is a diamond bottom bullish?
Yes, it is a bullish reversal pattern that confirms on a break above its upper right boundary.
How is it different from an inverse head and shoulders?
Its boundaries first widen and then narrow, forming a diamond, rather than resting on a single neckline.
What invalidates a diamond bottom?
A close below the lower right boundary.
Related chart patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.