The diamond rising pattern is a continuation pattern formed by the combination of a spreading triangle and a symmetric triangle, named for its diamond-like shape. It usually appears in an upward trend, indicating that after a period of consolidation, the market will continue the previous upward trend.
Pattern Characteristics
Spreading Triangle Stage: The left half of the diamond is a spreading triangle. Price fluctuations gradually widen, with higher highs and lower lows, forming an outward spreading shape. In this stage, market sentiment is relatively chaotic, with significant divergence between bulls and bears, and trading volume generally increases as price fluctuations expand. Symmetric Triangle Stage: The right half of the diamond is a symmetric triangle. As the range of price fluctuations gradually narrows, higher highs gradually decrease, and lower lows gradually increase, forming a converging triangle shape. In this stage, the forces of bulls and bears gradually tend to balance, market uncertainty gradually decreases, and trading volume tends to decrease as the range of price fluctuations narrows. Neckline: A line connecting the two low points of the spreading triangle and the two high points of the symmetric triangle, forming a neckline resembling the outline of a diamond. When the price breaks upward through the neckline, the diamond rising pattern is completed, and the market will likely continue the upward trend.
