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Diamond Top Formation: A technical analysis reversal pattern that is used to signal the end of an uptrend. This relatively uncommon pattern is found by identifying a period in which the price ...
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Diamond recognition trading revolves around investor psychology, as most patterns do. This pattern looks at a very specific way of thinking that factors into how the stock behaves. After a large movement, investors are eager either to take profits (bullish) or to short (bearish). This causes the first round of consolidation.
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