28 bearish patterns and short setups
Bearish chart patterns and short setups: head and shoulders, double top, bear flag, descending triangle, death cross and the bearish candlestick reversals.
What bearish patterns and short setups have in common
This is the largest family in the library, and it collects everything that reads as weakness: topping structures, bearish continuation shapes, moving-average breakdowns, distribution footprints and the bearish candlestick reversals. Most are mirrors of a bullish pattern documented elsewhere in the library, and the geometry is genuinely symmetric. The trading is not.
- Each identifies either a topping structure, a failed rally, or a continuation of an existing decline
- Most are the geometric mirror of a bullish pattern with the same structural logic inverted
- The invalidation level sits above the setup, which is the direction of unbounded risk on a short position
- Declines are faster and more volatile than advances, so these patterns resolve quicker and less tidily
What these patterns are telling you
Symmetric geometry does not mean symmetric trading. A short position carries borrow costs, unbounded upside risk and exposure to the sharpest rallies in the market, and those rallies happen in downtrends. Bearish patterns also fire throughout advancing markets, where most of them are absorbed without consequence. PatternGrade detects and grades these setups. It does not recommend acting on them, and the risk profile of a short is materially different from the mirror-image long.
PatternGrade grades what it finds and publishes how each grade has performed. It is not a financial advisor and does not give buy or sell recommendations.
Every bearish patterns and short setup PatternGrade scans
Rescanned across ~4,500 US stocks end-of-day, after every close.
Head & ShouldersA peak flanked by two lower peaks over a neckline: the classic topping reversal. PatternGrade scans every liquid US stock for head and shoulders tops.
Double TopTwo peaks at a similar level separated by a trough: the M-shaped topping reversal. Scanned after every close across every liquid US stock.
Triple TopThree failed attempts at the same resistance level. PatternGrade scans every liquid US stock for triple tops after each close.
Rounded TopA gradual, dome-shaped transition from uptrend to downtrend. Scanned across every liquid US stock after each close.
Bear FlagA sharp decline followed by a shallow drift higher on light volume. PatternGrade scans every liquid US stock for bear flags after every close.
Descending TriangleA flat floor with falling highs above it. PatternGrade scans every liquid US stock for descending triangles after each close.
Bearish PennantA small converging consolidation directly after a sharp decline. Scanned after every close across every liquid US stock.
Inverted Cup & HandleThe bearish mirror of the cup and handle: a rounded top followed by a shallow drift higher. Scanned across every liquid US stock.
Death CrossThe 50-day moving average crossing below the 200-day. PatternGrade scans every liquid US stock for fresh death crosses after each close.
Stage 4 DowntrendThe declining phase of Weinstein's stage analysis: price below falling moving averages. Scanned across every liquid US stock after every close.
Power DowntrendA strict, persistent downtrend regime, the bearish mirror of the power trend filter. Scanned after every close across every liquid US stock.
52-Week LowStocks trading at or near their lowest price of the past year. PatternGrade lists new 52-week lows across every liquid US stock after each close.
Breakdown Below SMAA decisive loss of a key moving average that had been acting as support. Scanned across every liquid US stock after each close.
New Low BounceA bounce off a 52-week low after a large decline: the dead cat bounce pattern documented by Bulkowski. Scanned across every liquid US stock.
Gap DownA session opening below the previous day's low, leaving an unfilled gap. PatternGrade lists gap downs across every liquid US stock after each close.
Distribution DayA meaningful decline on heavier volume than the prior session: institutional selling. Scanned across every liquid US stock after each close.
Selling ClimaxA sharp, accelerating decline on climactic volume: the capitulation low described by Wyckoff. Scanned across every liquid US stock after every close.
Hanging ManA hammer-shaped candle appearing after an advance rather than a decline. Scanned across every liquid US stock after each close.
Bearish EngulfingA down candle whose body fully engulfs the prior up candle's body. PatternGrade scans every liquid US stock for bearish engulfing patterns.
Evening StarA three-candle topping reversal: an advance, a small indecisive bar, then a strong decline. Scanned after every close across every liquid US stock.
Dark Cloud CoverA down candle that opens above the prior high and closes below the midpoint of the prior up candle. Scanned across every liquid US stock.
Gravestone DojiA doji with a long upper wick and no lower wick, with open and close both near the low. Scanned across every liquid US stock after each close.
Three Black CrowsThree consecutive strong down candles, each closing near its low. PatternGrade scans every liquid US stock for this reversal after every close.
MACD Bearish CrossThe MACD line crossing below its signal line: a standard momentum turn lower. Scanned across every liquid US stock after each close.
RSI Bearish DivergencePrice making a higher high while RSI makes a lower high. PatternGrade scans every liquid US stock for bearish divergences after every close.
Stochastic Overbought RejectionThe stochastic oscillator turning down out of overbought territory. Scanned across every liquid US stock after each close.
Bearish Breakaway GapA gap that breaks a stock down out of a base or range on heavy volume. Scanned after every close across every liquid US stock.
Bearish Island ReversalA cluster of sessions isolated by a gap up and then a gap down: an abrupt top. Scanned across every liquid US stock after each close.
Bearish patterns and short setups FAQ
What is the most reliable bearish chart pattern?
Head and shoulders is the best-known and has the clearest structural argument — three waves of buying, each weaker than the last. It is also the most over-identified pattern in technical analysis, which is the real point: most charts called a head and shoulders do not meet the definition. PatternGrade will not tell you which bearish pattern is most reliable, because that is a performance claim. It will tell you, precisely and in public, what has to be true of the chart before it calls something a head and shoulders.
Are bearish patterns just bullish patterns upside down?
Geometrically, mostly yes. Behaviourally, no. Declines happen faster than advances, counter-trend rallies in a downtrend are sharper than pullbacks in an uptrend, and a short position's risk is unbounded in the direction the pattern can fail. The shapes mirror; the trading does not.
Can I use bearish patterns without shorting?
Yes, and many people do. A bearish pattern on a stock you hold is a reason to look at your position rather than a reason to take a new one, and the same signals are used to avoid buying into weakness. Nothing in this library assumes you intend to short.
Why is there a bullish pattern in the short setups family?
Selling climax sits here because it is found by looking for capitulation inside a decline. It belongs to the machinery of downtrends even though it reads as a potential bottom. Grouping by where the scanner looks rather than by outcome keeps the families honest.
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