Credo Technology Jumps 6.39% on Bullish Technicals and Heavy Volume

Credo Technology (CRDO) advanced 6.39% in the latest session, closing at $117.34 on elevated volume of 4.49 million shares, signaling strong bullish momentum. This surge follows a volatile week that included both significant gains and pullbacks.
Candlestick Theory
Recent candlestick patterns exhibit high volatility, with a bullish engulfing pattern emerging on August 4 (6.64% gain) after a sharp decline on August 1 (-3.58%). The August 6 bullish close near the session high ($117.34 vs. high of $118.41) confirms buyer dominance. Key resistance is established at the July 31 peak of $118.95, while support holds firm near $107.50–$108.50, validated by the August 5 low of $108.50. The $110 psychological level acts as secondary support, given its confluence with the August 4 low.
Moving Average Theory
Credo trades well above its major moving averages, reflecting a sustained uptrend. The 50-day MA (approximately $97) and 100-day MA (approximately $83) both slope upward, while the 200-day MA (approximately $66) confirms the long-term bull trend. The current price holding above all three averages, coupled with the 50-day MA crossing above both longer-term averages earlier this year, indicates robust intermediate-term momentum. However, the wide dispersion between price and the 200-day MA warrants monitoring for potential mean reversion.
MACD & KDJ Indicators
The MACD histogram shows strengthening bullish momentum, with the MACD line crossing above its signal line in early August after a brief dip below zero. This reversal from neutral territory aligns with the price rebound. Meanwhile, the KDJ oscillator presents an overbought signal, with the %K line (88) and %D line (85) both exceeding the 80 threshold. While this suggests near-term exhaustion risk, the MACD-KDJ divergence—where MACD momentum accelerates while KDJ flattens—implies underlying strength that could delay a pullback.
Bollinger Bands
Bollinger Bands expanded sharply during the August 6 rally, with price closing near the upper band ($119.50 est.), indicating high volatility and bullish pressure. The bandwidth expansion after a period of contraction (late July to early August) confirms breakout validation. The midpoint of the bands ($110 est.) now acts as a critical support level, coinciding with the August 4-5 consolidation zone.
Volume-Price Relationship
Volume trends validate recent price movements. The August 6 surge occurred on volume 29% above the 20-day average, confirming bullish conviction. Notably, the August 1 decline recorded the highest volume in three weeks (5.72 million shares), highlighting capitulation before the rebound. Conversely, the August 5 pullback saw below-average volume (3.49 million), suggesting limited seller commitment. Accumulation patterns appear intact, with higher volume on up days (August 4, 6) versus down days (August 5).
Relative Strength Index (RSI)
The 14-day RSI reads 73, entering overbought territory (>70) for the first time since late July. While this warns of short-term overheating, it lacks bearish divergence, as the RSI peak aligns with the July price high. Historically, Credo has sustained RSI levels above 70 during strong uptrends (e.g., March-April 2025), though sustained readings above 75 would heighten correction probability. Traders should note that RSI is a warning, not reversal signal.
Fibonacci Retracement
Applying Fibonacci to the July 31 swing high ($118.95) and August 1 swing low ($102.81), key retracement levels cluster with technical supports: the 50% level ($110.88) aligns with the August 4 low and psychological support, while the 61.8% level ($112.78) served as resistance on August 5. The price has now reclaimed the 78.6% level ($115.49), opening a path toward the 100% extension at $118.95. A confluence of resistance exists between $118.41–$118.95, where the prior high converges with the full retracement target.
Confluence and Divergence Observations
Strong confluence appears at $110–$111, where the 50% Fibonacci level, 20-day Bollinger midline, and July 29-30 support cluster. This zone offers robust downside protection. Divergence emerges between KDJ overbought signals and MACD/volume confirmation of strength, suggesting consolidation may precede reversal. The $118.95 resistance represents a critical confluence of horizontal price resistance and Fibonacci completeness. A decisive break above this level would signal a resumption of the primary uptrend, while rejection could trigger profit-taking toward $110 support.