Diamonds are rare, and so are diamond patterns on charts. I learned from Ralph Acampora that diamonds can be either a reversal pattern or a continuation pattern.
I can see a rough diamond pattern on the chart (below) of Action Alerts PLUS holding Cimarex Energy (XEC) and the indicators should be able to tell us whether the pattern will break to the upside or the downside.
Cimarex has corrected slowly in the last three months and a bullish divergence between price and momentum could foreshadow the resumption of its bull move.
In this daily chart of XEC, above, we can see the first half of the triangle begin in August, with the subsequent wider swings in October, November and December. Since December, prices have weakened turning the 50-day moving average line down along with the On-Balance-Volume (OBV) line. In the lower panel is the 12-day momentum study with equal lows in February and March versus lower lows in price. This difference between price and momentum is called a bullish divergence and could foreshadow a turn to the upside. A rally back above the 200-day moving average line or above $130 might be just enough of a push for this diamond to break out on the topside.