Wolfspeed, Inc. Price Analysis Powered by AI

Wolfspeed (WOLF) On the Brink: Breakdown or Bounce? Why More Downside Is Likely

WOLF has experienced extremely volatile price action over the past four months. The massive down moves (Apr-May) transitioned to an abrupt price collapse in June (bottoming at $0.40), followed by a violent short-squeeze/recovery rally to $2.77 on July 7, then a secondary push to $3.32 on July 8. Since then, the price has corrected violently and now trades at $1.52.
The last 4 weeks show a failed attempt to hold above $2.00, with lower highs and a clear rejection from $2.52 and again at $1.78. Price bounced briefly off $1.40 and $1.30 levels multiple times but is now stuck in a tightening range between $1.50–$1.80.
Recent closes show bearish wicks and failed rallies, illustrating strong supply pressure/weak demand beyond $1.60–$1.70.

The past two trading sessions show lower highs and persistent inability to gain above $1.57–$1.59, with each rally quickly sold and volumes dropping. Microtrades post-17:30 are trending in the $1.51–$1.55 range. The current close is precisely $1.52, essentially at today’s volume-weighted price floor.
The July 30 hourly candles show steady downward pressure post 13:30, with each bounce rejected and closing near the lows.

Short-term EMAs (5/10): Flat to slightly negative slope with price below the 5-EMA, indicating short-term downward pressure and lack of upward buying momentum.
20-EMA/50-EMA: Both remain above the current price with a spread (i.e., 20-EMA ~$1.56, 50-EMA much higher), confirming bearish bias in the medium term.
Death Cross (Earlier in June): 20-EMA crossed below 50-EMA concurrent with the crash—longer-term implications remain decisively bearish.

Estimated RSI is near 36, rising from oversold levels at 20–30 in late June/early July. However, it failed to recapture 50, showing rallies are not strong enough to flip bullish momentum.
Short-term (hourly) RSI rolls from 60 to sub-40 during the day, indicating loss of trading momentum and reemergence of selling interest.

MACD (12,26,9): Daily MACD histogram has started to flatten after early July’s sharp bounce, but signal line remains below zero (bearish territory).
Hourly MACD: Bearish crossover in last trading session—the histogram moving deeper into negative, signifying increasing short-term bearish momentum.

Volume has dried up compared to July 1–10’s capitulation and squeeze; down 60–80% from July's spike days, implying waning trader interest and thus increased risk of further price drift.
No bullish volume divergence visible; strong selling volume remains present with every attempt to break above $1.55–1.60.

Price sits at the lower third of the band, hugging the lower band edge for most of the past 48 hours. This kind of channeling action, combined with slumping volume, often precedes another volatility expansion (usually downward in weak tape).
Bands are starting to contract, foreshadowing a possible spike in volatility upon break of current support (or resistance).

Immediate Support: $1.48–$1.50 (Friday/Monday lows, micro floor).
Major Support: $1.30–$1.35 (multiple daily closes in July), then $1.10 (gap launch base).
Immediate Resistance: $1.60 (failed tops in last several sessions), then $1.80, then $2.00.
Long-term Resistance: $2.30 and $2.52 (summer maxima).

Descending triangle on 4-hr chart: Flat bottom at $1.52, series of lower highs from $3.32, $2.78, $2.02, $1.78, $1.61. Pattern suggests high breakout probability—direction biased down given declining volume and persistent bear momentum.
Failed recoveries from all short-term rallies: "dead cat bounce" psychology in play. No evidence of buyers stepping in upon breakdowns.

ATR (14): Currently in a tightening phase; daily ATR dropped from $0.50+ to about $0.18–0.22, meaning further big price swings are likely if support fails.

Gaps up (July 1, 2, 7) have been fully faded. Historical tendency in WOLF post-gap is more unwinding/bleed out.
Recent failed squeeze: A high-probability set-up for further capitulation as weak hands exit.

Retail interest is waning; the short squeeze failed to break the long-term bearish structure.
No bullish catalysts apparent in the immediate tape (no big up-volume, no abrupt reversal patterns, no positive news evident in price action).

Odds favor breakdown < $1.50, with stop-run and panic extension towards $1.33–1.36 as next liquidity zone. Lack of energy on the buy side combined with persistent failure at resistance levels points to a probable grind down to the next major daily support within the next 24 hours.
Based on the compression next to support, the optimal risk/reward is to enter a short (Sell) at $1.52–1.53 (current/next bid fill), with exit/cover at $1.35, expecting follow-through on descending triangle break.

Entry: $1.52 (current trade).
Stop: For risk controls, would set a stop at $1.59 (above micro-resistance).
Target: $1.35 (just above multi-session support, to front-run probable buyers and prevent being caught in a bounce).

Sudden short-lived squeeze on news or sector momentum. However, technicals and flow suggest that risk is minimal for next 24 hours due to exhaustion of recent buying attempts and lack of volume expansion.

Rationale: All major technicals (trend, moving averages, volumes, bearish patterns, failed rallies, etc.) point to continued downside over the next 24 hours, with breakdown below $1.50 likely to trigger further selling.
Optimal Trade: Sell at $1.52, target $1.35 to cover, stop $1.59 if short-term resistance breaks.