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<DIV><FONT size=2>TASC on Patterns - DIAMONDS</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Regards,<BR>Ton Maas<BR><A 
href="mailto:ms-irb@xxxxxxxxxxxxx";>ms-irb@xxxxxxxxxxxxx</A><BR>Dismiss the 
".nospam" bit (including the dot) when replying.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>More:</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV align=left><FONT size=3><FONT face=Arial><B><TT>I. Cardinal Reversal 
Patterns</TT></B> </FONT></FONT></DIV>
<BLOCKQUOTE style="MARGIN-RIGHT: 0px">
  <DIV align=left><FONT size=3><FONT face=Arial><B><TT>A. At Tops</TT></B> 
  </FONT></FONT></DIV>
  <BLOCKQUOTE style="MARGIN-RIGHT: 0px">
    <DIV align=left><FONT size=3><FONT face=Arial><B><TT>1. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/DublTop.html";>The 
    Double Top</A></TT></B></FONT> <BR><FONT face=Arial></FONT><FONT 
    size=3><B><TT>2. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/HeadShldr.html";>Head-and-Shoulders</A></TT></B> 
    <BR><B><TT>3. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/RoundingTop.html";>Rounding 
    Top</A></TT></B> <BR><B><TT>4. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/AscndTop.html";>Ascending 
    Top</A></TT></B> <BR><B><TT>5. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/TriTop.html";>The 
    Triangle</A></TT></B> <BR><B><TT>6. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/BroadTop.html";>Broadening 
    Top</A></TT></B> <BR><B><TT>7. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/ComplexTop.html";>Complex 
    Top</A></TT></B></FONT></FONT></DIV></BLOCKQUOTE>
  <DIV align=left><FONT size=3><FONT face=Arial><B><TT>B. At Bottoms</TT></B> 
  </FONT></FONT></DIV>
  <BLOCKQUOTE style="MARGIN-RIGHT: 0px">
    <DIV align=left><FONT size=3><FONT face=Arial><B><TT>1. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/DublBtm.html";>The 
    Double Bottom</A></TT></B></FONT> <BR><FONT face=Arial></FONT><FONT 
    size=3><B><TT>2. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/HeadShldrBtm.html";>Head-and-Shoulders</A></TT></B> 
    <BR><B><TT>3. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/RoundingBtm.html";>Rounding 
    Bottom</A></TT></B> <BR><B><TT>4. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/DescendBtm.html";>Descending 
    Bottom</A></TT></B> <BR><B><TT>5. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/TriBottom.html";>Triangle 
    Bottom</A></TT></B> <BR><B><TT>6. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/BroadBtm.html";>Broadening 
    Bottom</A></TT></B> <BR><B><TT>7. <A 
    href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/ComplexBtm.html";>Complex 
    Bottom</A></TT></B></FONT></FONT></DIV></BLOCKQUOTE></BLOCKQUOTE>
<DIV align=left><FONT size=3><FONT face=Arial><B><TT>II. Other Reversal 
Patterns</TT></B> </FONT></FONT></DIV>
<BLOCKQUOTE style="MARGIN-RIGHT: 0px">
  <DIV align=left><FONT size=3><FONT face=Arial><B><TT>A. Right-Angle 
  Formations</TT></B></FONT> <BR><FONT face=Arial></FONT><FONT size=3><B><TT>B. 
  <A 
  href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/Diamond.html";>Diamond 
  Formations</A></TT></B> <BR><B><TT>C. Wedge Formations</TT></B> 
  </FONT></FONT></DIV>
  <BLOCKQUOTE style="MARGIN-RIGHT: 0px">
    <DIV align=left><FONT size=3><FONT face=Arial><B><TT>1. Rising 
    Wedge</TT></B></FONT> <BR><FONT face=Arial><B><TT>2. Falling 
    Wedge</TT></B></FONT></FONT></DIV></BLOCKQUOTE>
  <DIV align=left><FONT face=Arial size=3><B><TT>D. One-Day 
  Reversals</TT></B></FONT></DIV></BLOCKQUOTE>
<DIV align=left><FONT size=2></FONT>&nbsp;</DIV>
<DIV align=left><FONT size=2>Return to <B><A 
href="http://www.traders.com/Documentation/FEEDbk_docs/content.html";>Table of 
Contents</A></B> </FONT></DIV>
<DIV>&nbsp;</DIV><FONT size=2>
<H1 align=center>
<HR noShade>
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<BLOCKQUOTE>
  <P><FONT size=3><B><TT>Return to <A 
  href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/NoviceTrader.html";>Topic 
  Outline</A></TT></B></FONT></P>
  <BLOCKQUOTE>
    <P align=center><FONT size=3><B>Diamond Formation</B></FONT></P></BLOCKQUOTE>
  <P>The <B><I>diamond formation</I></B> reversal pattern is found relatively 
  infrequently. When it does form, however, it usually does so at market tops 
  rather than at bottoms. This is consistent with its appearance, which suggests 
  a confused, active market found at a top more often than at a bottom. As 
  Figure 1 shows, the diamond starts off as a broadening formation and then 
  consolidates, usually forming a symmetrical triangle. The combination of price 
  patterns first broadening and then consolidating gives the geometry for which 
  the diamond is named. This shape becomes more apparent when trendlines, like 
  those shown, are drawn connecting successive peaks and valleys. The shape has 
  also been described as a complex head and shoulders with an odd center 
  movement.<BR>&nbsp;</P></BLOCKQUOTE>
<CENTER>
<P><IMG align=bottom height=257 
src="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/Diamond.gif"; 
width=423 naturalsizeflag="3"><BR>&nbsp;</P></CENTER>
<BLOCKQUOTE>
  <BLOCKQUOTE>
    <P><B>FIGURE 1: DIAMOND FORMATIONS. </B>This reversal pattern, which is 
    found relatively infrequently, usually shows up at market tops rather than 
    market bottoms. This is consistent with its appearance which suggests a 
    confused, active market found at a top more often than at a 
  bottom.</P></BLOCKQUOTE></BLOCKQUOTE>
<BLOCKQUOTE>
  <P><BR>Volume activity can help distinguish a diamond from an ordinary 
  head-and-shoulders formation. The tendency might be to see a formation and 
  interpret it as a diamond, when in reality it is only a head-and-shoulders 
  pattern. This bias toward the diamond might be because an upsloping neckline 
  would allow an earlier entry of the position and therefore more potential 
  profit. A genuine diamond pattern is signified by a decrease in volume during 
  the second half of the price pattern.&nbsp;</P>
  <P>This volume pattern is similar to the one found in a standalone symmetrical 
  triangle. When a diamond forms at a top, the following downmove is usually 
  significant. A minimum expectation of the move can be estimated by measuring 
  the distance in points at the widest part of the diamond. Prices usually move 
  from the breakout price to a low, giving a net change at least equal to this 
  measurement, typically further.</P>
  <P align=center>Return to <B><A 
  href="http://www.traders.com/Documentation/RESource_docs/NoviceTraders/NoviceTrader.html";>Topic 
  Outline</A></B> or <B><A 
  href="http://www.traders.com/Documentation/FEEDbk_docs/content.html";>Table of 
  Contents</A></B> 
  <HR>

  <P></P></BLOCKQUOTE>
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