A broadening that turns into a triangle — emotional explosion giving way to fatigue and surrender. Rare, subjective, and almost always at a top.
The diamond formation is a somewhat exotic pattern that combines two phases — a broadening formation followed by a triangle. It begins by widening like a megaphone, then at some point reverses to contract like a triangle, and when the upper and lower lines are joined, the outline of a diamond emerges.
This pattern appears most often at major tops — late in an uptrend, emotion first explodes (the broadening phase), then fatigue arrives and participants withdraw (the contraction). Diamonds at bottoms exist but are rare.
The essence of a diamond is the two-stage emotional drama. The broadening half represents the climax; the triangle half represents the collapse of consensus. Only after both have played out does the verdict come — usually in the direction opposite to the prior trend.
But this pattern carries an important caveat: it is visually rare, and often subjective. Many analysts will call a shape "a diamond" while others see only "an irregular consolidation". The classical literature acknowledges this ambiguity.
Members Only
Full access is reserved for members of the library.