Comprehensive Technical Analysis of Wolfspeed, Inc. (WOLF)

1. Trend & Price Action Analysis

Long-Term Trend

• Sharp Downtrend: From February highs near $7, WOLF collapsed steadily with only brief reprieves. After the late March mega-gap down from $5+ to the $2s (an over 50% drop in a single session), continued downward momentum persisted, followed by another catastrophic drop in late May from ~$3 down to barely above $1. Since then, the stock has remained extremely weak.
• Support & Resistance:
  • Last major support: $1.20–$1.25 (now decisively broken intra-day).
  • Major resistance: $1.30, $1.40, $1.65, $2.00.
  • No price memory below: Today set a new low below $0.85, establishing potential for uncharted territory on the downside.
• Intraday Catastrophe (June 18):
  • Opened $1.24, shot to $1.53, then waterfall dropped to $0.83 at maximum volume spikes.
  • Closed near $0.87, at the session lows—a highly bearish signal implying weak hands remain trapped and sellers are overwhelming buyers at all price levels.

Volume Profile

• Volume Surge: Massive volume was observed on each major breakdown. For June 18, over 78M shares traded, dwarfed only by prior catastrophic breakdowns (notably May 21, March 28), evidencing forced capitulation or additional negative catalyst.
• Volume-Price Relationship: Each new low is being met with surging volume—typically a hallmark of ongoing distribution, not accumulation.

2. Volatility & Momentum Indicators

ATR (Average True Range)

• Expansion: Multiple days recently with 20–40% ranges. In today’s trade, the 5-minute ATR hit historic highs as price collapsed from $1.53 to $0.83 intraday.
• Implication: Extreme volatility; an important caution to position size management, but also reflects absence of any strong underlying bid.

RSI (Relative Strength Index)

• Calculation:
  • The past 14 days, RSI has trended from 30 (oversold) to sub-20 today—deeply oversold and trending lower, with almost no sign of divergence or energy for reversal.
• Interpretation: Persistent oversold conditions match waterfall price action. However, extreme oversold readings alone aren’t a reversal signal when structural collapse is underway.

MACD

• Observation: MACD line has steadily declined below the signal line since early June, with increasing separation. There is no sign of a convergence—momentum remains decisively bearish.

3. Candle Structure and Patterns

Intraday Candlesticks (June 18)

• Open: $1.24, High: $1.53, Low: $0.833, Close: $0.873
• Pattern: Long upper wick followed by relentless red bodies; closing at the very low—classic breakdown/professional selloff with no sign of buyers.
• Multi-day: There are no established reversal patterns (no hammers, bull engulfing, inside days). Instead, daily candles since the May breakdown show progressively lower highs and lower lows, with every bounce being sold violently.

4. Gap and Volume Event Analysis

• March 28: $5.38 → $2.59 (~50% collapse, gigantic 176M shares).
• May 21: $3.13 → $1.28 (~60% collapse, 255M shares)—likely coinciding with dire news or delisting/credit event.
• Subsequent days: Only small and quickly filled bounces. All attempts at basing ($1.40–$1.60) have ended in fresh lows.

5. Moving Averages

• Short-term MAs (5-day, 10-day): Both declining sharply, perched well above the current price (~$1.20–$1.35). No support from moving averages; rather, they are acting as fast downside resistance.
• Long-term MAs: Useless at this stage—too far removed from price, reinforcing the massive downtrend.

6. Chart Patterns & Structure

• Break of All Major Lows: Price is in uncharted territory. Every prior low has been broken with conviction and volume. No sign of double bottom, base, or reversal formation.
• No Support Below: Sub-$1 territory contains no historical price support. While there could be some psychological buying interest at $0.75, $0.50, or $0.25, there are no technical structures to rely on.
• Bear Flag/Continuation Patterns: Small intraday consolidations act as bear flags, followed by sharp drops during volume spikes.

7. Order Flow, Sentiment, and Market Structure

• Order Flow: Severe skew to sell orders. Level 2 price action through the breakdowns implies aggressive market sell-offs with very little resting bid.
• Sentiment: Market perception deeply pessimistic—confirmed by both volume and price action. There’s no evidence of large institutional accumulation; all bounces have been retail-driven and are quickly crushed.
• Potential Catalysts: Ongoing delisting risk, bankruptcy/insolvency rumors, or failed business model likely exacerbating the rout.

8. Mean Reversion & Oversold Analysis

• Historical Precedent: While deeply oversold readings could prompt a technical bounce, collapsing companies often trade much lower and even accelerate downward in such scenarios.
• No Mean Reversion Yet: All past bounces have been rapidly rejected, and the consistent closing at or near the lows suggests a lack of buyers. Extreme oversold conditions are not sufficient for a reversal in such an acute decline.

9. Risk Management and Trading Plan

• High-Risk Environment: Liquidity is high, but risk of shares gapping lower overnight is extreme. Volatility makes shorting risky, but the multi-session trend and lack of support statistically favor further downside moves over upside retracements.
• Entry Consideration: Given the close at $0.873—right at the session low—and full breakdown below every prior support, odds favor continuation to the downside. An optimal entry for a new short would be as close as possible to the current price, targeting further intraday or next-session lows.

10. Synthesis and Outlook

• Bearish momentum is fully intact.
• There is no detectable technical reason for reversal at current levels.
• Every major breakdown has led to more forced selling.
• Expect further downside—potentially toward $0.60, $0.50, or even lower if negative news persists.

Conclusion & Prediction

• The next 24 hours are likely to feature continuing panic/liquidation, with a high probability of testing lower psychological levels ($0.80, $0.75, $0.50).
• While a sudden dead cat bounce is possible due to extreme oversold status, technical evidence does not support a sustainable reversal at this time.

Final Trading Decision: Initiate a SHORT (SELL) position as close to the current price as possible.

Open Price: $0.87 (current price region—enter on minor bounce intraday if possible for best risk/reward) Close Price (take profit): $0.60 (targeting next logical psychological support)

BEWARE: Unexpected company news, bankruptcy filing, or regulatory halt could increase volatility—monitor order flow and stop losses closely as the environment is extremely volatile.