Diamond Bottom – A diamond pattern forms on a chart in a downtrend. Typically the taller the diamond pattern the more reliable the indicator. Volume should also diminish as the diamond shape forms.
Confirmation of Chart Pattern – The Diamond Bottom is confirmed with a bullish breakout of the chart pattern.
Psychology of Pattern – This chart pattern is a form of consolidation where the bears are unable to find further conviction to the downtrend and the market reverses as the bears run out of steam.
Market Signal – A Diamond Bottom is a bullish reversal