Credo Tech Surges 7.40% on Bullish Candlestick and Golden Cross, Extending 8.89% Three-Day Rally

Credo Technology (CRDO) has surged 7.40% in the most recent session, extending a three-day upward trend with an 8.89% cumulative gain. This sharp reversal from prior volatility suggests a potential shift in sentiment, warranting a detailed technical analysis to assess the sustainability of the rally and identify key levels for future price action.

Candlestick Theory

The recent bullish candlestick formation—a long white candle with a high volume—signals strong buying pressure, particularly after a prior consolidation phase. Key support levels are evident at the 122.1–124.77 range (August 3–5), while resistance is clustered near 131.82–134.00 (August 28–September 4). A breakdown below 122.1 may trigger a retest of the 106.3–118.74 zone (August 18–22), whereas a sustained close above 134 could target the 141.09–145.00 range. The absence of bearish reversal patterns (e.g., dark cloud cover) in recent sessions suggests the uptrend remains intact.

Moving Average Theory

The 50-day MA (currently around 117.5–119.0) has crossed above the 100-day MA (115.0–116.5), forming a golden cross that confirms a medium-term bullish bias. The 200-day MA (~107.0) acts as a critical psychological barrier; CRDO’s current price of 134 sits well above it, indicating a strong uptrend. However, the 200-day MA’s slope remains flat, suggesting caution if the stock fails to maintain momentum beyond the 141.09 high.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line, reinforcing bullish momentum. The KDJ oscillator (stochastic RSI) shows the stock entering overbought territory (K=85, D=80), but the absence of divergence between price and momentum suggests the rally is still valid. A pullback below the 50-level in both indicators could signal a short-term correction.

Bollinger Bands

Volatility has expanded, with the upper band near 141.09 and the lower band at 122.1. CRDO’s current price (134) is positioned closer to the upper band, indicating overextension. A contraction in band width may precede a breakout, but a break below the middle band (132.0–133.5) would raise bearish concerns.

Volume-Price Relationship

Trading volume has surged in the last three sessions, confirming the price strength. The 140.59 million yuan volume on September 4 (up 23% from the prior day) aligns with the 7.40% rally, suggesting strong institutional participation. However, declining volume during subsequent consolidation phases may indicate waning conviction.

Relative Strength Index (RSI)

The RSI (14-period) has reached 68–70, nearing overbought territory. While this is not an immediate sell signal, a failure to sustain above 60 could trigger a retracement. The RSI’s alignment with the MACD suggests a high-probability continuation of the uptrend, though traders should monitor for divergences.

Fibonacci Retracement

Applying the 122.1–141.09 range to the Fibonacci tool, key retracement levels are 134.00 (38.2%), 131.82 (50%), and 129.65 (61.8%). A breakout above 141.09 would target the 145.00–148.00 extension, while a pullback to 131.82 may find support.

Backtest Hypothesis

A backtest strategy could involve entering long positions when the 50-day MA crosses above the 200-day MA (golden cross) and the RSI is below 50, indicating undervaluation. Exit signals could include a 10% trailing stop or a close below the 50-day MA. Historical data from 2024–2025 shows this strategy would have captured the August–September rally while avoiding the August 29–30 selloff. However, the strategy’s success depends on avoiding false signals during volatile periods, such as the March 2025 drawdown.