Yesterday was NR7; breaking below prior day’s low — strong volatility expansion bearish.
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Four filters stack together. The first two establish the NR7 condition: today's range (high minus low) must be smaller than yesterday's range AND smaller than the range of each of the prior 2-to-6 sessions -- confirming the tightest bar in a full week. The third filter adds directional confirmation: the close must be below the prior day's low, meaning buyers failed to hold the prior session's floor. The fourth filter requires volume above the 20-period moving average, screening out low-conviction drifts. All four must fire together; NR7 alone without the break and volume is just a compression setup (see NR7 Squeeze), not a breakout signal.
NR7 Bear Break is primarily used on the Daily timeframe by swing traders looking for 2-to-5 day directional trades following a contraction. The core risk is a false breakdown: price closes below the prior low, triggers the screen, then reverses higher the next session. This happens frequently in uptrending stocks where the NR7 is a healthy pause rather than distribution. Volume confirmation reduces but does not eliminate this. The setup fails most often near major support levels, into earnings events, and when the broader market is in a strong uptrend. Compare it with the NR7 Bull Break screen for the bullish mirror. For higher-conviction setups after longer compression, the High ATR and Bollinger Squeeze Break Bear screens offer alternatives with broader confirmation.
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This screen finds stocks where yesterday was the narrowest daily range in the last seven sessions (NR7) and price is now breaking below the prior day's low on elevated volume. The NR7 condition identifies volatility compression -- a standoff between buyers and sellers that often precedes a sharp directional move. This screener adds directional confirmation: the break goes bearish, with above-average volume validating the move. Short sellers and swing traders use this to catch the early stage of a downside expansion after a contraction period. Traders searching for "NR7 breakdown stocks" or "narrow range volatility breakout" will find this setup relevant.
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