Detailed Technical Analysis for Wolfspeed, Inc. (WOLF)

1. Price Action and Candle Structure

• Recent Crash: The most dramatic observation is an unprecedented gap down and evaporation in price from ~$3.13 on 2025-05-20 to a low of $0.82 and close at $1.28 on 2025-05-21, on huge volume (over 255 million shares). The following session (2025-05-22) saw a volatile recovery, peaking intraday at $1.87 and closing at $1.71.
• Intraday Recovery: Price opened at $1.02 and rapidly surged to $1.87 before falling back to $1.67-$1.71 area, indicating panic selling followed by aggressive short covering and speculative dip buying.
• Candle Patterns: The recent candles are large-bodied (long range), with significant wicks, showing extreme volatility and indecision. On 5/22, high ($1.87) and close ($1.71) are close, with a relatively short lower wick: this is a possible exhaustion of bears for the session.

2. Volume Analysis

• Unprecedented Spike: The volume on the crash day (5/21) is over 10x recent daily averages – a classic capitulation marker. The following day, volume is also extremely high, supporting the possibility of forced margin selling, institutional exit, and/or high frequency trading.
• Volume/Price Divergence: On 5/22, intraday volume spikes on upside moves ($1.02 → $1.87), then drops as price stabilizes. This may indicate short-term bottom fishers outpacing sellers.

3. Trend & Momentum Analysis

• Trend: From early March to present, WOLF is in a confirmed downtrend. The price slid from $6.50+ to sub-$2 in less than two months, with several failed rallies. The trend is down on all time frames.
• Moving Averages: All short-term averages (5, 10, 20 EMA/SMA) are sharply sloping down and far above the current price, indicating strong overhead resistance.
• MACD/Oscillators: Although exact MACD values aren't provided, visually, the collapse and rapid move probably means a deep oversold status with possible bullish divergence forming, i.e., momentum of new sell-off is weaker than the initial leg.
• RSI: Estimated RSI (observation-based): likely sub-20 after the crash, meaning severe oversold, but such values can persist in crashes.

4. Support and Resistance Levels

• Supports: The only notable support is the new low at $0.82 (intraday on 5/21). Psychological support exists at $1.00 (round number). Previous support areas (such as $2.10–$2.30) have been violated, turning into resistance.
• Resistance: The recovery high $1.87 (5/22 day high) is now immediate resistance, with minor bands at $2.10–$2.30 and $3.00 if an oversold rally intensifies.

5. Gap Analysis and Event Risk

• Gap Down: This kind of gap and crash is usually news-driven (earnings miss, corporate problem, or regulatory action), so expectation of a fast, sustainable recovery is low unless a reversal catalyst emerges.
• Dead Cat Bounce: The huge rally from $1.02 to $1.87 and retracement to $1.71 in one day is classic post-crash 'dead cat bounce' territory. Typical behavior involves a failed rally over 1–2 subsequent sessions before further downside or basing action.

6. Tape and Order Flow

• Late Day Fizzle: High of day was set early, with price drifting steadily lower toward $1.67-$1.71, suggesting that early buyers are already selling to reduce exposure - not holding for a trend reversal. This is bearish.
• Current Bid/Ask: The final minutes print at $1.66–1.71, with no immediate bounce.

7. Pattern Analysis

• No BasE: There is no evidence of price stabilization or classic bottoming patterns (double/triple bottom, rounding base). The movement thus far is emotional and news-driven, not technical.
• No Reversal Structure: No hammer, no bullish engulfing - all candles are indecisive.

8. Statistical & Probabilistic Techniques

• Mean Reversion: Statistically, after a 60-70% price collapse, a short-term bounce is typical, but the probability is high for further retest/revisit of the lows unless a solid base is established.
• Volatility: Intraday swings of 10–30% indicate risk is very high and favor short-term, tactical trades over medium-term investing.

9. Sentiment and Psychology

• Sentiment: Extreme fear, as evidenced by volume and price action. Early dip buyers likely trapped if price fails to surge above $1.87 resistance.

10. Final Synthesis & Probability Tree

• Base Case: After such a crash, with price unable to close near highs, there's a 60-70% chance of a retest of the $0.82–$1.10 low in the next 24 hours. If broken, acceleration to sub-$1.00 is likely. Only a sustained move >$1.87 would negate this view.
• Trade Setup: Odds favor shorting the bounce, targeting a fade back toward the crash lows.
• Risk: Short squeezes can be violent, so position management is key.

11. Investment Techniques Deployed

• Technical trend analysis (price action, candle structure)
• Classical support/resistance
• Volume profile & capitulation logic
• Moving averages (trend slope and distance)
• Oscillator-based signals (RSI, MACD estimation)
• Pattern recognition (base, hammer, reversal candles)
• Probabilistic/statistical mean-reversion and post-crash behavior
• Order flow/tape reading
• Sentiment/psychology analysis

12. Confluence and Trading Plan

All key techniques indicate further pressure to the downside with high-odds for a retest of $1.00 or lower within next 24 hours, barring unexpected news or gap up. Short entries at $1.69–$1.71 zone offer risk-efficient setup with stops above $1.88 (high of relief rally). Take profit at or just above the recent panic low ($1.05–$1.10) to front-run support absorption by bargain hunters.

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Summary:

• Momentum is overwhelmingly bearish, all rallies are selling opportunities until a proper base forms. High volatility means opportunistic shorts can succeed, targeting a fade to the recent panic low.