Wolfspeed, Inc. Price Analysis Powered by AI

Wolfspeed (WOLF): Relentless Bearish Momentum — Sell Rallies as Support Crumbles

From late March to July, WOLF's price chart showcases a catastrophic downtrend. Price collapsed from $6.13 (Mar 26) to the $1.70 level (late July), with several exceptionally high-volume sell-offs (notably on Mar 28, May 21, Jun 18, and Jul 1-8).
Major Breakdown Events:
- Mar 28: Gap down from $5.38 to $2.59 (+165M volume) signaled a fundamental event, likely earnings/major announcement.
- May/early June: After attempting a technical retracement to $4.46 (May 2), the stock failed to reclaim any meaningful levels, instead declining to the $1.2 region by early June with heavy volumes and persistent lower lows—bear market structure.
- June 18 & onwards: Swift collapse (Jun 18: $1.24 open, $0.87 close, over 80M volume; Jun 30: $0.43 open, $0.40 close, 128M volume) indicates forced liquidations or margin calls, often seen in capitulation.
Current Zone: Since July 1, huge volatility with wild intraday swings and liquidity spikes (Jul 1: $0.73 open, $1.10 high, $0.79 close, 516M volume; Jul 7: $1.44 open, $2.77 high, $2.31 close, 461M volume) indicate intense speculative activity and possible short squeezes.
Recent Behavior (last 5 sessions): After a high volatility squeeze up to ~$2.5 (Jul 8), the stock faded back down and stabilized in the mid-$1.4-$1.7 range, closing today at $1.78.

Recent sessions: Show small-bodied candles with long wicks both directions (notably Jul 21–24), giving us clear indecision and volatility.
Latest hourly data (Jul 24): Showed a failed attempt to push above $2.06, followed by a fade down to $1.76, then recovery toward $1.78 into the close.
Pin Bars & Reversal Hints: Today saw repeated failed rallies above $1.95–$2.06, indicating strong overhead supply. Closing near the lower end of the day’s range despite an afternoon rally attempt implies sellers still control the tape.

Volume Spike Patterns: Throughout June-July, any price advances saw very high volume, but also reverted quickly—signifying distribution, not accumulation.
Sessional Distribution: The last session showed strong volume alignment with price drops, particularly post-13:30Z. Buying attempts (seen from 17:30Z onward) failed to take out prior highs.

No real opportunity for meaningful long-term MA crossovers due to the rapid decline; however, short-term EMAs (e.g., 5/15 periods) would be steeply downward sloped. Any price above these moving averages quickly reverses.

Estimation: The sustained collapse and recent failed bounces suggest that RSI dipped into oversold (<30) territory several times but each rally attempt has not produced a sustained trend shift. Each overbought reading above 70 since July 7-8 met swift reversals.

Likely Characteristics: MACD is likely negative, with even bullish crossovers being short-lived. The divergence seen on the July 7 surge to $2.7 was immediately reversed, confirming bear market rally behavior.

Obvious resistance: $2.05-$2.10 (yesterday’s high and today’s repeated fail zone)
Intermediate support: $1.65-$1.70 (today’s intraday low cluster)
Major support: $1.40-$1.45 (multiple session closes and lows from July 11–14, 21)

Falling Knife: WOLF is the classic falling knife chart. Although recent short-covering bounces created high volatility, the overall structure remains heavily bearish; each rally is aggressively sold.
Bear Flag/Pennant: The past few sessions present a slight bear flag—sideways drift after a sharp drop—suggesting another leg down if support fails.
No Base Formation: Absent any firm basing, no technical bottom is confirmed.

Hourly tape indicates sellers appear into every spike, closely spaced limit orders capping rallies at $1.95-$2.06. Short sellers likely using liquidity to establish new positions into strength.

For the July bounce: $0.40 low (June 30) to $2.77 high (July 7); 61.8% retracement targets around $1.35 (retested as support multiple times July 11-21), while price currently sits just above the 50% retrace ($1.58). These levels were briefly supported, then broke down—implying further downside ahead if $1.70 fails.

ATR (Average True Range): Spiked massively July 1–8, currently remains elevated; intraday ranges of $0.27–$0.40 per session. This implies high risk and that further violent moves (potential gaps) are highly plausible.

Due to enormous supply from prior holders, negative momentum, and a lack of positive reversal signals, sentiment is overwhelmingly bearish. Each rally becomes an opportunity for trapped longs to exit or for shorts to reload.

Bias: Strongly bearish until price can reclaim and hold above $2.10. The recent rejection at this level combined with a failure to create higher supports indicates another test of the lower supports is likely.
Scenario: Expect a breakdown test toward $1.62–$1.65 in the next 24h. If psychological support at $1.60 breaks, a further flush to $1.45–$1.50 is highly plausible.
Bear “capitulation retest” is not ruled out, targeting $1.35–$1.40 zone before another bounce attempt.

Downside risk: High probability of break below recent lows; stops should be placed above $1.92 (near the recent failed rally level) for short positions.
Upside risk: Shorts must be aware of short-term squeeze potential, but overall chart structure favors sellers.

Recommendation: "Sell (Short Position)". Bearish confluence from multi-timeframe trend analysis, price action, resistance/supply clusters, volume distribution, and failed bullish momentum.
Optimal Entry: On a failed retest toward $1.80–$1.83 (current market: $1.78; slight pop is possible at open).
Target: Conservative take-profit at $1.52 (prior support area/swing lows). Aggressive traders could target $1.40, but volatility is high and mean reversion is possible after another sharp drop.

Summary:

WOLF remains in a high-volatility, high-risk, structurally bearish regime with ongoing distribution and no sign of bottoming. Sell any rallies below $2.00 with a target near $1.52 for the coming day, as the path of least resistance remains down.