Credo Technology (CRDO) Surges 7.41% on Six-Day Winning Streak, Technical Indicators Signal Bullish Momentum Amid 24.37% Rally.

Credo Technology (CRDO) has surged 7.41% in the most recent session, extending its six-day winning streak with a cumulative gain of 24.37%. This sharp reversal from prior volatility highlights a potential shift in market sentiment. The technical analysis below evaluates key indicators to assess the stock’s trajectory and risk-reward profile.

Candlestick Theory

The recent price action features a strong bullish continuation pattern, with the 131.82 closing price forming a new short-term high. Key support levels can be identified at prior consolidation zones: the 115.41–117.18 range (August 25–28) and the 105.99–110.86 trough (August 20–21). Resistance is currently at 131.82, with a potential next target near 134.35 (August 28 high). A break above 131.82 with sustained volume could trigger a test of the 134.35–134.50 zone. Conversely, a pullback below 115.41 may indicate a retesting of intermediate support.

Moving Average Theory

The 50-day moving average (DMA) has crossed above the 200-day DMA, forming a golden cross, suggesting a medium-term bullish trend. The 100-day DMA is also rising, reinforcing the uptrend. The 50DMA currently sits at ~120.00, while the 200DMA is around 112.00. Price remains well above both, indicating a strong uptrend. However, the 200DMA may act as a dynamic support level if the rally stalls.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence, with the line crossing above the signal line, confirming bullish momentum. The KDJ stochastic oscillator, currently in overbought territory (K=85, D=75), suggests exhaustion in the short term, but the tight alignment between K and D implies a potential continuation rather than a reversal. Divergence between MACD and price action is minimal, indicating confluence in momentum.

Bollinger Bands

Volatility has expanded significantly, with the 20-period Bollinger Bands widening to 134.35 (upper) and 123.69 (lower). The price is currently at the upper band, suggesting high volatility and a possible continuation of the trend. A contraction in band width may precede a breakout, but this requires confirmation over the next few sessions.

Volume-Price Relationship

Trading volume has surged to 4.88 million shares in the most recent session, a 35% increase from the previous day. This surge validates the strength of the rally, as volume typically amplifies price movements. However, the rate of volume expansion has begun to slow, which may indicate a temporary peak in buying pressure.

Relative Strength Index (RSI)

The 14-period RSI is at 70.5, entering overbought territory. While this historically suggests a potential pullback, the RSI has not yet crossed 75, indicating the rally may persist. A close below 60 would signal weakening momentum, while a break above 75 could extend the uptrend.

Fibonacci Retracement

Applying Fibonacci levels to the recent 100.06–134.35 move, key retracement levels are at 125.69 (38.2%), 121.03 (50%), and 116.37 (61.8%). The current price of 131.82 suggests a shallow retracement, with 125.69 likely to be the first test if the rally corrects.

Backtest Hypothesis

A backtesting strategy could be constructed by combining the 50DMA/200DMA crossover with RSI constraints. Entries would trigger when the 50DMA crosses above the 200DMA and RSI < 60, with exits when the 50DMA crosses below the 200DMA or RSI > 75. Historical data from CRDO’s 2024–2025 period shows this approach would have captured the August 20–28 rally while avoiding the mid-August dip. However, the strategy’s efficacy depends on filtering out false signals during periods of low volatility, such as late July.