Step 1: Price Action & Trend Analysis

Long-Term Trend

• The chart initially shows Wolfspeed (WOLF) trading steadily above $5 in early March before a dramatic multi-day crash on 3/28, plunging from the $5 range to $2.59 on massive volume (176M shares, up from ~20M). This capitulation-like event signals material fundamental or news-driven weakness.
• After this, the price consolidates and enters a volatile downtrend, sliding to $1.19 by 5/30, with brief, weak rallies quickly sold off. The inability to regain prior support, combined with decreasing highs, confirms this downtrend.

Recent Action & Possible Reversal

• In late June, another large-volume capitulation (6/21 & 6/30, 255M and 128M shares) sees WOLF tank to $0.40 on 6/30. This extreme extension below $1 is followed by a two-day surge back to $0.79 and $0.77 on 7/1-2, as extraordinarily high volumes signal short covering and speculative reversal buying.
• On 7/3, buying accelerates to $1.17 on 209M shares. On 7/7, the price explodes intraday to $2.76 and closes at $2.31 on 434M shares. This is a classically violent V-shaped reversal after forced liquidation and could be forming a lasting bottom.

Step 2: Volume & Order Flow Analysis

• Peak volumes (100M+ shares) correlate with price capitulation events—a textbook signal for a change of hands from weak to strong holders. Each major volume spike is followed, within days, by a rapid price run-up.
• The sheer speed from $0.40 to $2.76 in a week (up 590%) is only sustainable after extreme oversold conditions; otherwise, this would appear to be a blow-off move.
• Today's huge volume suggests either institutional accumulation or major squeeze dynamics.

Step 3: Intraday (Hourly) Analysis

• 7/7 13:30-20:00: Price runs from $1.44 to $2.76 and then settles at $2.31—a massive range.
• 14:30 to 15:30: Buyers push from $2.16 to $2.43, then bulls defend above $2.28 support for several hours.
• The low of the last hourly bar ($1.91) and quick recovery to $2.28 shows aggressive dip buying, confirming new demand near $2.

Step 4: Candlestick Patterns & Chart Formations

• On daily, Mar-Jun = descending channel/bear flag break to new lows below $1.00.
• Early July = bullish Marubozu candlesticks, few upper shadows, signaling strong control by buyers.
• Today: Long lower wick (7/7) on daily, with close well above intra-day lows. This is a hammer/reversal day.

Step 5: Technical Indicators

• Relative Strength Index (RSI): Would be extremely overbought after today’s move (likely >80), which can persist in strong reversal rallies.
• MACD: Likely shows sharp bullish crossover; increases positive momentum.
• Moving Averages (SMA/EMA): Price is now far above 20/50-day averages (likely around $1.20 and $2.00 respectively), suggesting overextended rally, but reclaims above 50DMA can fuel further upside.
• VWAP (Volume-Weighted Average Price): Intraday, price closing well above median VWAP for today, suggesting buyers dominated session.

Step 6: Support & Resistance

• Support:
  • $2.10 (today’s dip buy zone)
  • $1.91 (hourly low)
  • $1.17 (last week’s breakout base)
• Resistance:
  • $2.75–2.80 (today's high)
  • Minor: Psychological $2.50 zone

Step 7: Fibonacci Retracements (from $0.40 low to $2.76 high)

• 23.6% Retracement: ~$2.25 (very close to current)
• 38.2% Retracement: ~$2.03
• 50.0% Retracement: ~$1.58
• The fact that price is consolidating above $2.25 suggests holding above key Fibonacci levels.

Step 8: Pattern Recognition & Sentiment

• The pattern matches major short-covering rallies after extended downtrends. Typical outcomes:
  • Further squeeze and FOMO (fear of missing out) buying pushes price to $2.75–$3.00 in next 1–2 sessions.
  • Quick, sharp pullback to $2.10–$1.90 as late buyers get shaken out.
• Sentiment is rapidly flipping from panic to greed but remains fragile.

Step 9: Probabilistic Prediction (24-Hour Outlook)

Bull Case:

• If price can stay above $2.10–$2.25, expect retest of $2.75 high, and possibly a push towards $3.00 on continued volume and momentum.

Bear Case:

• Failure to hold $2.10 leads to quick drop to $1.90 or even $1.60 (the 50% Fib retracement), but broad-based demand likely to absorb, barring a negative fundamental catalyst.

Given the exceptional reversal volume, established new support, macro pattern, and ongoing bullish momentum, the probability slightly favors further upside after a brief consolidation/pullback. However, volatility will remain extreme.

Conclusion: Buy (Long)

• The technical evidence supports a continued reversal/short-covering rally, with optimal risk/reward near $2.25. Caution is warranted, but aggressive buyers will seek to accumulate dips toward $2.15-$2.25. A break above $2.76 targets $3.00+.

Entry: $2.25 (on a minor pullback to retest support or upon confirmed momentum above $2.30 intraday) Exit/Take Profit: $2.75 (at or just below today’s high, as potential supply will emerge at this level)

Risk can be managed with a stop below $2.00 for tighter risk control.

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Summary:

• Position: BUY (LONG)
• Open Price: $2.25
• Close Price/Take Profit: $2.75
• Stop Loss (not requested but prudent): $1.90 (optional)

Time Horizon: 24 hours

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