Credo Technology Plummets 6.07%: A Volatile Intraday Drama Unfolds

Summary
• CRDO drops 6.07% to $92.47 from an intraday high of $98.43
• Turnover surges to 3.99M shares, 2.67% of float
• 52W high of $104.35 now 7.7% above current price

Today’s session for Credo Technology (CRDO) has turned into a high-stakes thriller as the stock collapses 6.07% intraday, trading at $92.47 after opening at $98.43. The sharp selloff has triggered a 7.7% gap from its 52-week high and pushed the dynamic PE to 304x. With turnover at 3.99M shares and a 2.67% float rate, the Communications Equipment sector is watching this volatility closely.

Technical Downtrend Intensifies Amid Elevated Volatility
The 6.07% intraday drop in CRDO reflects a confluence of technical triggers rather than headline news. The stock has pierced below its 30D MA of $87.08 and 200D MA of $58.69, creating a bearish crossover. Options market data shows extreme implied volatility (IV) of 69-75% across key August and September contracts, signaling aggressive short-term positioning. The MACD (7.1) has crossed below its signal line (7.43), while RSI at 55.87 suggests weakening momentum. This technical breakdown is compounding liquidity pressure as the stock trades below its Bollinger Bands’ middle band.

Options Playbook: Leveraged Put Strategies in a Volatile CRDO Landscape
• 200D MA: $58.69 (far below current price)
• RSI: 55.87 (neutral but declining)
• MACD: 7.0989 (bearish crossover)
• Bollinger Bands: $104.01 (upper), $83.18 (lower)
• Gamma: 0.0189-0.022 (high sensitivity)

Technical indicators suggest a short-term bearish bias. Key support levels at $83.18 (lower BB) and $70.63 (200D support range) are critical. The August 15 P85 and P90 options stand out for aggressive positioning:

• CRDO20250815P85
- Type: Put
- Strike: $85
- Expiry: 2025-08-15
- IV: 74.19% (high volatility)
- L/R: 22.45% (high leverage)
- Delta: -0.2995 (moderate directional bias)
- Theta: -0.0668 (moderate time decay)
- Turnover: 203,226 (high liquidity)
- Gamma: 0.01796 (strong price sensitivity)
- Payoff: $3.47 under 5% downside scenario (ST=87.85)
- This contract offers optimal leverage with 74%+ IV and 22%+ leverage ratio, ideal for capitalizing on continued weakness.

• CRDO20250815P90
- Type: Put
- Strike: $90
- Expiry: 2025-08-15
- IV: 72.41% (high volatility)
- L/R: 15.21% (moderate leverage)
- Delta: -0.3999 (strong directional bias)
- Theta: -0.0594 (moderate time decay)
- Turnover: 90,674 (high liquidity)
- Gamma: 0.02046 (strong price sensitivity)
- Payoff: $7.82 under 5% downside scenario (ST=87.85)
- This contract balances leverage with directional exposure, ideal for a 10-15% drop in underlying price.

Trading View: Aggressive bears should prioritize P85 for maximum leverage, while P90 offers a balanced approach. Watch for a breakdown below $83.18 (lower BB) to validate the bearish case.

Backtest Credo Technology Stock Performance
The iShares Core MSCI All World ex-US ETF (CRDO) has historically shown resilience following a -6% intraday plunge. The backtest data reveals that the 3-day win rate is 54.43%, the 10-day win rate is 54.68%, and the 30-day win rate is 52.46%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 0.76%, suggesting that while the ETF may rebound, the returns are generally modest following a significant downturn.

Position for Volatility: CRDO's Technicals Point to Key Levels to Watch
CRDO's technical breakdown suggests short-term volatility is far from over. With IV at 69-75% and the stock trading 7.7% below its 52W high, the path of least resistance appears downward. Immediate support at $83.18 (lower BB) and $70.63 (200D range) will be critical. The sector leader Cisco (CSCO) is up 0.08%, but CRDO's divergence highlights its own technical pressures. Action Insight: Short-term traders should prioritize short-dated puts with 70-75% IV and 15-22% leverage ratios. Watch for a close below $83.18 to trigger deeper correction.