Credo Tech (CRDO) Surges 7.97% as Technical Indicators Signal Bullish Reversal

Credo Technology (CRDO) closed the most recent session with a 7.97% gain, reaching ¥149.9, signaling a potential short-term reversal after a prior 8.15% decline. This sharp rebound suggests a bullish candlestick pattern, such as a bullish engulfing or a morning star, indicating a rejection of lower prices. Key support levels are evident around ¥138.26 (2025-10-10 low) and ¥143.5 (2025-10-13 low), while resistance is forming at ¥151.15 (2025-10-09 high). The price action implies a possible breakout above ¥150, with the 50-day moving average (approx. ¥147.5) and 200-day MA (¥137.5) currently aligned in a bullish bias. However, the 100-day MA (¥145.0) suggests a narrower short-term trend, indicating confluence between mid-term and long-term indicators.

The 50-day MA crossover above the 200-day MA confirms a bullish long-term trend, while the 100-day MA (¥145.0) acts as a dynamic support. The price has remained above the 200-day MA since late September, reinforcing the uptrend. However, the 50-day MA’s rapid ascent suggests short-term momentum may be overextended. A breakdown below ¥145.0 could trigger a pullback to the 200-day MA, while a sustained close above ¥151.5 (2025-10-09 high) would validate a deeper bullish bias.

The MACD histogram has turned positive, with the MACD line crossing above the signal line (bullish Golden Cross), suggesting renewed momentum. The KDJ indicator shows K (60) crossing above D (50), aligning with the MACD signal. However, the RSI (90) is in overbought territory, indicating a potential near-term correction. This divergence between momentum indicators and price (which continues to rise) raises caution. The Bollinger Bands have expanded, with the price near the upper band, confirming heightened volatility. A retest of the ¥143.5 support level is likely if the RSI fails to re-enter neutral territory (<70).

The volume-Price relationship is mixed. The recent 7.97% surge was accompanied by a 5.98 million share volume, significantly higher than the 10-day average (4.2 million). This confirms strong buying pressure, but the subsequent 8.51% gain on 6.72 million shares (2025-10-08) also saw a volume spike, suggesting potential exhaustion. The RSI calculation, with average gains (¥6.97) outpacing average losses (¥0), yields an RSI of 90, reinforcing overbought conditions. While this does not guarantee a reversal, it highlights a high probability of a pullback.

Fibonacci retracement levels between ¥156.89 (2025-10-02 high) and ¥138.26 (2025-10-10 low) show key levels at ¥147.58 (50% retracement) and ¥142.57 (38.2%). The current price of ¥149.9 is approaching the 61.8% level (¥145.61), suggesting a potential target for a correction. Confluence between the 50% retracement and the 200-day MA (¥137.5) could act as a critical support zone if the price breaks below ¥145.0.

Backtest Hypothesis

The MACD Golden Cross strategy, as described in the provided backtest, demonstrates a 316.76% return from 2022 to 2025, far outperforming the NASDAQ benchmark (45.09%). This aligns with the current technical setup, where the MACD Golden Cross and KDJ crossover confirm bullish momentum. However, the overbought RSI (90) and expanding Bollinger Bands suggest caution. The strategy’s 10-day holding period would capture the recent 7.97% gain but may face risks if the correction materializes. The backtest’s zero max drawdown is optimistic, as the current overbought conditions and volume spikes indicate potential exhaustion.