Wolfspeed, Inc. Price Analysis Powered by AI

Wolfspeed, Inc. (WOLF): Downside Exposed as Bearish Patterns Persist – Short Setup Favored

Timeframe Analyzed: Last 4 months, with meticulous focus on the period from late June to present (2025-07-25).
Data Scope: Daily and intra-day (hourly) prices, with accompanying volumes.
Current Price: $1.64 as of 2025-07-25 21:00 UTC.

March through Early May 2025: Severe downtrend from $5.82 (March 27) to capitulation near $1.2 (May 21), characterized by successive lower highs/lows and recurring high-volume sell-offs.
Late May–Early July: Panic volatility, brief capitulation candle (May 21, $1.14 open, $0.82 low), ultra-heavy volume ($255M)—often a point of maximum pessimism.
July Recovery: Violent short squeeze rally (July 1–7), with volume spikes (July 1: $516M shares traded, price jumps from $0.40 to $0.79).
Current Phase: Downtrend resumes post-July spike; slow grind down from $2.77 (July 7 high) to the $1.60 area, with much smaller candles.

From July 14–24: Partial rebound, but limited momentum. Repeated failures to reclaim $1.80–$2.00 resistance.
Last 48 hours: Minor bounce to $1.78 (July 24), then steady intra-day fade to $1.62 (July 25 post-market). Lower highs and stalling volume indicate exhaustion.

Capitulation & Climax Volumes: May 21/July 1 see highest volumes (255M/517M) — often near major trend changes, but after quick bounces, buyers step away and selling resumes.
Recent Volumes: Decreasing participation (2–4M per hour in regular session 7/25), indicating unclear conviction from bulls and waning buying interest.
Distributional Topping: Multiple days (July 8–16: $2.5 failed, 33–109M daily shares), hint at large holders unloading into failed speculative rallies.

Primary Resistance Zone: $1.78–$1.80 (recent highs, failed retests multiple times on July 24–25), then $2.00 (psychological/structural).
Immediate Support Zone: $1.60 (today's low and prior congestion), then $1.45–$1.48 (recent pivot area July 21–22), deeper support at $1.20 (June lows).
Observation: Each failed rally forms a lower high, while support levels break more easily, signifying ongoing distribution.

Moving Averages (Estimate @10/20 Periods): Rapidly trending down. The 10-day MA approximates $1.68, 20-day MA near $1.89 — price trades below both, confirming bearish momentum. Short rallies have failed at/under these averages.
RSI (Relative Strength Index 14): Recent swings suggest an oversold bounce (RSI dipped <25 on June 27/July 1), but now back near neutral (40–45), failing to break into bullish territory (>50).
MACD: Last crossover was bearish in mid-July. No signs of meaningful bullish divergence; MACD histogram contracting, signaling waning momentum for upside.
Bollinger Bands: Price hugging lower band over past week, minor mean reversion toward the mid-band, but failing to gain upper band — indicative of a range-bound fade or further downside.
ATR (Average True Range): Spiked during capitulation, now compressing, but daily ATR remains abnormally wide for the price ($0.15–$0.18), suggesting a volatile trading environment.

Capitulation Long Lower Wicks: Seen May 21, June 18, July 1—classic reversal signals, but follow-through limited to sharp dead-cat bounces; sellers reassert quickly.
Recent Hourly Dojis/Inverted Hammers: Numerous small-bodied candles and upper wicks (July 25), reflecting buying exhaustion and indecision at $1.65–$1.70.
Absence of Bullish Patterns: No clear bullish engulfing, morning star, or reversal clusters since July 7–8 rally. Instead, more distribution candles and weak closes.

Descending Triangle: Forming on recent price structure (lower highs at $1.80, horizontal support $1.60); typically a bearish continuation pattern.
No Confirmed Double-bottoms/Wedges: Flat failed retests, but not enough evidence of base-building.

Orderbook Tape (Implied from Volume/Price Action): High willingness to sell near $1.70–$1.80, persistent ask pressure. Flat bids below support ($1.62–$1.60), likely stop-runs lurking under $1.60.
Speculative Activity: Occasional short squeezes, but all buying is rapidly unwound. No sustained accumulation behavior.

Volatility Abnormality: This stock is in a post-capitulation environment, but with instability. Intraday ranges exceed 10% of price; risk is high for both bull and bear.
Lack of Fundamental Positive Catalyst: Price action hints at bankruptcy risk, delisting fears, or disastrous event — reading technicals only, but sees no 'value' buyers stepping up.

Bearish Bias: Multiple failed rallies, relentless lower highs, declining volume on up-moves, and a critical support test at $1.60 suggests the path of least resistance is down. If $1.60 breaks, swift move to $1.48, possibly even $1.20 if selling intensifies.
Short-Term Scenario: Expect retest of $1.60 within next session; if broken, a flush toward $1.48 is probable. Only a reclaim of $1.80 with strong volume would neutralize the setup.

Entry for Short Position: Wait for a minor intraday bounce back toward $1.64–$1.66 for better risk/reward. Stop above $1.75 (prior resistance, volume shelf), target exit at $1.48.
Aggressive Traders: Could scalp on $1.60 break, but potential for sharp, illiquid moves exists.

Recommendation: ENTER SHORT (SELL) on any relief bounce to $1.64–$1.66. Immediate momentum is negative, risk is well-defined; reward to downside is compelling relative to current supply/demand structure.
Take-Profit: Target $1.48 (previous support and congestion). Note: Further downside is possible, but $1.20 would be reached only if panic returns.

Summary Table

Final Trade: Sell/Short with optimal entry near $1.64, target close at $1.48. Stop if $1.75 is convincingly reclaimed.