Diamond chart formations resemble a head and shoulders pattern with a V-shaped neckline, but they are rare. Diamond chart reversals are rare at market bottoms; they are more common at market peaks and with high volume. It is important to resist the temptation to classify every head and shoulders top as a diamond formation since diamonds are variations of head and shoulders tops. As the diamond will signal a break in trend sooner than a head and shoulders pattern, which may result in a premature short position, they will want to avoid it. To calculate a diamond formation's breakout potential, add the distance between the highest and lowest points in the diamond formation. When a breakout from the diamond chart formation occurs, stocks typically go much higher. Diagonal Bar Chart Design