Credo Technology Rises 3.26% Amid Technical Bullish Signals And Volatility

Credo Technology (CRDO) closed at $149.63, marking a 3.26% gain on the latest trading day. This positive move occurs within a context of significant volatility over the past year, with prices ranging from lows near $30 to highs approaching $176. The following technical analysis applies key indicators to assess the current state and potential future trajectory.
Candlestick Theory
Recent price action for Credo Technology shows potential stabilization attempts. The last three sessions form a potential "Morning Star" pattern: a long red candle on Sept 29th ($142.93 close), a small-bodied doji-like candle on Sept 30th ($145.61 close within the prior day's range), followed by today's green candle closing near its high. This pattern suggests waning selling pressure and potential bullish reversal confirmation if the price surpasses the Oct 1st high ($145.66) decisively. Key immediate resistance is at today's high of $155.59, followed by the psychologically important $160 level. Solid support is evident near $145.78 (today's low) and stronger support near the late-September swing low around $138.00.
Moving Average Theory
The moving averages present a challenging picture. The current price ($149.63) hovers precariously just above the critical 50-day moving average (50-DMA, calculated around $148.80), acting as immediate support. Below this, the 100-DMA (approx $135.00) provides secondary support. Crucially, the long-term 200-DMA (approx $122.40) remains significantly below, indicating the primary long-term trend remains structurally bullish. However, a confirmed break below the 50-DMA could accelerate selling pressure towards the 100-DMA. Importantly, the 50-DMA is in danger of crossing below the 200-DMA – a "Death Cross" – which typically signals potential prolonged bearish momentum should it occur.
MACD & KDJ Indicators
The MACD (12,26,9) for Credo Technology has recently generated a bullish crossover; the MACD line crossed above the signal line just prior to the recent uptick. The histogram has also turned positive, indicating building bullish momentum after a sustained bearish period since early September. The KDJ indicator (9,3,3) shows the K-line (>80) and D-line (>75) deep within overbought territory, suggesting the short-term rally may be becoming extended and susceptible to a pullback. While the MACD supports further upside, the overbought KDJ advises caution against chasing strength near-term. Sustained movement above the 50-DMA could see MACD strengthen further.
Bollinger Bands
Bollinger Bands (20,2) have contracted noticeably compared to the high volatility seen in late September. Price currently trades near the middle band (approx $148, often acting as dynamic support/resistance). This contraction signals reduced volatility and often precedes a significant price move. A decisive close above today's high ($155.59) would also push the price towards the upper band (~$160), suggesting a potential breakout attempt. Conversely, failure near the middle band and a drop towards $145 would target the lower band (~$136).
Volume-Price Relationship
Volume analysis offers constructive signals for Credo Technology. The recent recovery on Oct 2nd was accompanied by significantly higher volume (over 6.1 million shares) compared to the preceding down days (e.g., ~3.6M on Sept 30th). This suggests strong buying conviction underpins the breakout above the 50-DMA. Furthermore, the volume spike during the late September sell-off (exceeding 7.7M shares on Sept 24th) marked capitulation, often preceding exhaustion of a downtrend. Sustained volume on upwards moves reinforces bullish sentiment.
Relative Strength Index (RSI)
The 14-day RSI for Credo Technology currently reads approximately 62. This positions it in neutral territory, having recovered from oversold levels below 30 during the sharp September decline. It avoids immediate overbought (>70) concerns, suggesting there is room for further price appreciation in the short term before becoming technically stretched. However, the trajectory is more important than the absolute level; a sharp move towards 70 on lower volume might signal weakening momentum despite the RSI not being technically overbought yet.
Fibonacci Retracement
Applying Fibonacci retracement to the major swing high (approx $176 on Sept 22nd) and the swing low ($138 on Sept 25th) identifies key retracement levels. The 38.2% retracement sits near $152.40, which aligns closely with yesterday's high ($145.66) acting as minor resistance. The critical 50% retracement level is near $157.00, coinciding with the psychological $160 level and high-volume nodes from late September, suggesting strong resistance. The 61.8% retracement near $161.60 aligns with the Sept 29th high. On the downside, a break below $138 targets deeper retracements, notably the 78.6% level ($135.00), which intriguingly aligns with the 100-DMA and the consolidation lows seen in late August/early September, creating significant confluence support.
Confluence and Divergence Summary
Significant confluence exists around the $145-$149 zone, combining the 50-DMA, the overnight support level, the VWAP of recent sessions, and the lower bounds of recent consolidation. This area provides crucial support. Resistance confluence is strongest around $156-$160 (50% Fibonacci, Sept 29th high $152.75, Sept 23rd gap open near $155, and the 200-period moving average on hourly charts). A notable bullish divergence occurred leading into the late September low: the price made a lower low ($138 vs. previous ~$145), while the RSI and MACD histogram made higher lows, signaling weakening downside momentum prior to the bounce. The main current divergence is between the MACD’s emerging bullish crossover and the KDJ’s overbought state; the MACD suggests more upside potential if momentum continues, while the KDJ warns of short-term exhaustion. The proximity to a potential Death Cross (50 crossing below 200-DMA) remains a major structural divergence from an otherwise positive volume and momentum setup. Overall, technicals suggest a cautiously bullish bias above $145, especially if supported by volume, targeting $156-$160, contingent on avoiding a breakdown below the key moving average confluence.