Wolfspeed, Inc. (WOLF) — Detailed Technical Analysis

1. Overview & Context

Wolfspeed, Inc. (WOLF) is currently trading at $1.48, reflecting a staggering collapse from prices above $6 in late Q1 2025. The most recent sessions after 5/21/2025 have experienced exceptionally high volatility and volume, indicating significant structural changes in the stock—likely due to a major corporate event (earnings, regulatory, bankruptcy rumors) or complete investor sentiment collapse. This context is vital, as traditional technical indicators and price action must be interpreted through the lens of extreme risk and capitulation.

2. Price Structure & Patterns

Long-Term Chart Patterns

• Gap Down and Capitulation: On 5/21, price gapped from $3.13 to as low as $0.82, closing at $1.28 on explosive volume (255M shares vs. typical <40M daily volume), suggesting a major structural event.
• Descending Channel: Prior to this, price was trending downward in a persistent channel from $7 (Feb) to $3 (May) before the collapse.
• Short-term Base & Dead Cat Bounce: Post-gap, WOLF attempted a bounce to $1.87 on 5/22, then faded to $1.45 and has since struggled to recover meaningfully above $1.55.

Intraday Price Action (last trading session 5/27)

• Range-Bound Behavior: Tight, choppy range from $1.46 to $1.50 for most of the session, with several failed attempts to reclaim $1.55 or $1.60 (short-term resistance).
• Failed Bounces: Intraday rallies above $1.50 quickly sold off. Last close at $1.48, volume sharply lighter than during crisis, implying waning speculative interest.

3. Volume Analysis

• Capitulation Volume: The spike to 255M shares on 5/21 signals panic selling and, potentially, forced liquidations.
• Post-Capitulation: Large, but declining volume on 5/22 (125M) and 5/23 (68M), then a marked volume drop on 5/27 (35M). This pattern is typical of dead-cat bounce attempts in failing stocks.
• Recent Lulls: Low recent volume relative to the event-driven days implies little buying conviction and potentially the start of a slow grind lower as speculators exit.

4. Key Technical Levels

• Immediate Overhead Resistance: $1.52 (intraday), $1.55, $1.60 (prior minor highs)
• Support Levels: $1.32 (recent intraday low), $1.28 (capitulation day close), $0.82 (capitulation day low)—all susceptible to breakdown.

5. Technical Indicators

A. Moving Averages (observed/approximate)

• 20-period MA: Collapsing with price; likely in the $1.50–$1.52 area as dynamic resistance.
• 50-period MA: Well above price (~$3+), confirming long-term bearish trend.
• Conclusion: Price remains well below all key MAs—classic bear market structure.

B. RSI (Relative Strength Index)

• Current Behavior: Likely hovering around oversold (<30) since the gap, but failed bounces suggest persistent weak momentum—typical for companies under existential threat.

C. MACD (Moving Average Convergence Divergence)

• Signal Line: Deeply negative, no indication of reversal. Brief bullish cross attempt on light volume was sold into.
• Momentum: Persistent bearish momentum. Small upside spikes are met with heavy supply.

D. Bollinger Bands

• Squeeze Observed: Bands are moderately wide due to recent volatility, but have started to constrict. Price clings to lower band, indicating no sustained mean-reversion.

E. Volume Profile / VWAP

• VWAP Levels: For the post-capitulation trade, VWAP is around $1.50–$1.52. Most trading occurs just below current price, suggesting supply dominance at these levels.

F. Fibonacci Retracements

• Attempting Bounce: Retracements from capitulation low ($0.82) to bounce high ($1.87) place the 50% level near $1.34, aligning with intraday support.
• Bearish Failure to Hold 38.2%/50% Levels: Repeated intraday closes beneath the $1.55/$1.60 area signal lack of bid.

G. Candlestick Pattern Analysis

• Doji/Spinning Top Clusters: Recent candles are indecisive, but in the context of a downtrend, these often signal continuation lower.
• No Reversal Bottoms: Absence of hammer, engulfing, or morning star patterns—all bounces are weak and immediately sold.

6. Order Flow & Sentiment Analysis

• Order Book (Implied from Chart): Heavy supply above $1.50. Minor support at $1.32 and $1.28. No clear signs of aggressive dip buying.
• Sentiment: Market clearly remains risk-off. Retail traders who entered during dead cat bounce phases are underwater and likely to capitulate further on any renewed weakness.

7. Volatility Analysis

• ATR (Average True Range): Enormous daily ranges amid collapse; currently contracting ($1.32–$1.55) but still much higher than pre-crash.
• Implied Volatility: Implied to remain extremely elevated—both tail-risk and standard deviation moves possible, favoring short-term, high-conviction trades.

8. Historic Precedent & Analogues

• Bankruptcy & Delisting Candidates: This chart closely mirrors prior blown-up names on the verge of bankruptcy or delisting—repeated false bottom attempts followed by progressive new lows.

9. Advanced Pattern Recognition (Wyckoff, Elliott Wave)

• Wyckoff: In Distribution/Markdown phase post-failure. No signs of true Accumulation. Weak, low-volume rallies are immediately rejected.
• Elliott Wave: No impulsive bullish reversal structure. Rather, short covering and then lower lows dominate the pattern, typical of final slides.

10. Fundamental Overlay (Implied)

• The sharp volume and price collapse is so extreme, it suggests a critical existential concern. While fundamentals are not detailed here, the market is acting as if insolvency or major default is imminent.

11. Scenario & Probability Matrix (Next 24 Hours)

• Bearish Continuation: 65% — Breakdown below $1.32 targeting $1.28 and then possibly a secondary flush toward $1.00 or new lows if panic resumes.
• Range-Bound Drift: 25% — Low-volume chop between $1.45 and $1.55 as liquidity dries up.
• Short-covering Squeeze: 10% — Reclaim $1.55 and squeeze to $1.60–$1.70 (quickly sold).

12. Trade Plan & Risk Management

• Short Bias (Sell): Favoring short side due to trend, structure, and absence of meaningful reversal.
• Entry Strategy: Optimal SALE on rebound toward resistance, ideally near VWAP at $1.52–$1.53. Use a tight stop above $1.60 (recent swing high + psychological level).
• Take Profit: Scale out as price approaches $1.33 (intraday low/support) and further toward $1.28 (capitulation close). Remain flexible for an “overshoot” panic toward $1.00 with trailing stop.

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FINAL VERDICT: SELL (SHORT) any bounce toward $1.52–$1.53. Target $1.33 for cover, and watch for extension to $1.28. Risk managed with a hard stop above $1.61. NO long until decisive reversal pattern appears with volume, which is currently lacking.

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SUMMARY TABLE:

• Bias: Sell (Short)
• Open Price: $1.52 (optimum on bounce)
• Close Price (Take Profit): $1.33
• Stop Loss: $1.61

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NOTE: Due to extreme volatility and risk of news-driven rebound, position size should be smaller than usual and execution should be nimble.