Yesterday was NR4; breaking below prior day’s low — volatility expansion bearish.
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The NR4 condition requires yesterday's range to be smaller than each of the prior three sessions -- confirming a four-bar compression. "Close crosses below prior low" is a strict cross-detection check: the close was above the prior low on the previous bar and is now below it, meaning this fires on the exact bar of the breakdown. Volume above the 20-period average confirms that the downside break has genuine participation -- not just a drift below support on thin activity. The cross filter rather than a simple "below" comparison is important: it prevents the screen from firing on bars that were already below the prior low without a fresh breach. All three conditions on the same bar produce a low-frequency, high-specificity signal.
NR4 Bear Break is used by traders looking for short entries with well-defined risk: the NR4 bar's high becomes the natural stop. The setup performs best when the four-day compression occurs after a prior downtrend, where NR4 represents a brief seller pause before continuation, rather than a compression in an uptrend where bulls may reclaim price quickly. The primary failure mode is the false breakdown: close below the prior low, screen fires, then price reverses above it within the same or following session. This is common near major support levels (52-week lows, key moving averages) where buyers defend aggressively. Earnings events can cause the NR4 compression to resolve violently in either direction -- trading around earnings is a different risk profile than a pure technical breakout. For the bullish mirror, see NR4 Bull Break. For seven-session compression with bearish resolution, see NR7 Bear Break. For broader volatility context, compare High ATR and Bollinger Squeeze Break Bear.
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This screener identifies stocks where yesterday was an NR4 bar -- narrower range than the prior three sessions -- and price has now crossed below the prior day's low on elevated volume. It captures the exact session when a four-day compression resolves to the downside with conviction. Short sellers and swing traders use this as a directional entry signal on the first day of downside expansion from a compression base. Common search phrases: "NR4 bear break", "inside bar breakdown below prior low", "narrow range 4 bearish breakout volume".
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