Credo Technology Drops 3.14% As Technicals Show Key Support At 114.50

Credo Technology (CRDO) has declined 3.14% in the most recent session, marking two consecutive down days with a cumulative loss of 6.42%. This analysis examines technical indicators to assess potential price direction.
Candlestick Theory
Recent price action shows two consecutive bearish candles closing near session lows, indicating persistent selling pressure. The August 14 session formed a long lower shadow (114.57 low vs. 117.33 close), signaling intraday buying interest near the 114.50–115.00 zone. This area now establishes immediate support, with resistance observed at the 120.46 high of the same session. A sustained break below 114.50 could accelerate declines toward the 110.00 psychological support level established in early August.
Moving Average Theory
The 50-day moving average (approximately 103.50) remains below the current price, reinforcing the ongoing intermediate uptrend. However, the slope is flattening following the recent pullback. Both the 100-day MA (near 89.00) and 200-day MA (around 67.00) show upward trajectories, supporting the long-term bullish structure. With price now hovering 14% above the 50-DMA, consolidation is possible to allow the moving averages to catch up before a potential resumption of the uptrend.
MACD & KDJ Indicators
The MACD histogram is trending downward despite being above the signal line, suggesting weakening momentum. A bearish crossover appears imminent if selling pressure persists. The KDJ oscillator shows K-value at 46.5 (neutral territory), with D-value convergence implying indecision. While no extreme readings exist, the K-D convergence near the 50 midline signals near-term directional uncertainty. Bearish momentum would strengthen if K falls below D.
Bollinger Bands
Bollinger Band width expanded significantly during the August 12–13 decline (128.56 high to 114.57 low), indicating increased volatility. Price now hovers near the lower band (approximately 114.50), typically a support region during uptrends. A failure to rebound from this band within 1–2 sessions may signal continuation of the bearish move. Monitoring band contraction will be key for volatility normalization.
Volume-Price Relationship
Distribution patterns stand out, with down days (August 13 and 14) exhibiting volumes of 4.68M and 4.39M shares, respectively – notably higher than the 3.24M volume during the August 12 advance. This divergence suggests institutional selling. The August 6 rally saw volume expansion (4.52M shares), highlighting asymmetry where selling conviction exceeds buying interest during the current pullback phase.
Relative Strength Index (RSI)
The 14-day RSI reading of 63.08 is in neutral territory but has declined sharply from likely overbought levels in early August (>70). Current positioning suggests weakening momentum though not yet oversold. Caution is warranted as RSI typically offers early warnings; a breach below 50 could trigger additional technical selling. Historical support near 40 RSI may provide a floor for buyers.
Fibonacci Retracement
Using the swing low of 107.56 (August 4) and high of 128.56 (August 13), key retracement levels emerge: 123.60 (23.6%), 120.54 (38.2%), 118.06 (50%), and 115.58 (61.8%). Current price at 117.33 tests the 50% retracement with next support near the 61.8% level (115.58), which aligns with the August 14 intraday low of 114.57. Confluence between Fibonacci and candlestick support near 115.00 strengthens this technical floor.
Confluence arises between Fibonacci support (115.58), candlestick lows (114.57), and Bollinger Lower Band (114.50), creating a critical defense zone for bulls. However, bearish volume divergence and flattening moving averages suggest consolidation may precede any trend resumption. A decisive break below 114.50 opens downside toward 110.00, while reclaiming 120.46 resistance would signal recovery potential.