Diamond bottom stock chart pattern cheat sheet

1. Diamond bottom chart formation forms after a downtrend and breakout is upwards.
2. Diamond bottom chart pattern is a short term bullish reversal pattern.
3. This chart pattern has 4% failure rate in bull market and 3% failure rate in bear market
4. Tall and wide formation of pattern performs better than the short and narrow patterns.
5. After breakout stock price meet the desired target 85% of the time in bull market and 60% in bear market.
6. Average rise in stock price after the breakout is 36%
7. Drawback of this pattern is after reaching the target stock price give all the gains therefore it is advisable to book profit after reaching the desired target.
8. Failure rate of this chart pattern in bear market is very less as 3%.
9. Volume during the formation of this chart pattern reduced gradually as shown in the picture. 
10. Volume start increasing when breakout occurs as shown in picture.

                                   

1. Diamond bottom pattern formation start when stock price forms higher high and lower lows.It is a first sign of reversal of trend in any stock.
2. Stock trade in very narrow range during the formation of the pattern.
3. Breakout is supported by increase in volume. as shown in picture.
4. This chart pattern represent the battle between buyers and sellers.
5. On the left hand side of the Diamond pattern as shown in picture buying demand in stock push the stock price to a new high until selling pressure forces the stock price to fall and forms a lower lows.
6. On the other half of the diamond more buyers are finding stock price attractive and more buyers are active to purchase . Buyers are waiting for buying the stock which prevents the formation of lower lows.
7. On the breakout day volume is higher than 1 month average.
8. Once price reach the target price it retrace back 30% from that high.
9. Price reach the ultimate target between 1 month to 4 month.
10. To set the target measure the high of the diamond and low of the diamond. Subtract and find the difference. Check the breakout level and add the difference to find the ultimate target of the pattern.

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