Credo Technology Surges 10.02% as Bullish Technical Indicators Fuel 7-Day 33.24% Rally

Credo Technology (CRDO) has surged 10.02% in the most recent session, extending its upward trajectory to seven consecutive days with a cumulative gain of 33.24%. This aggressive price action suggests strong bullish momentum, supported by expanding volume and a narrowing range of volatility. Below is a structured technical analysis of the stock’s dynamics.

Candlestick Theory

The recent seven-day rally has formed a bullish continuation pattern, with prices consistently closing near daily highs. Key resistance levels emerge at $164.06 (the recent peak) and $149.03 (a prior consolidation area), while support is anchored at $124.77 and $114.7 (notable troughs). A potential bearish reversal could be signaled if the price fails to hold above $124.77, particularly if a bearish engulfing or evening star pattern forms. Conversely, a break above $164.06 may validate a continuation of the uptrend, though traders should monitor for signs of exhaustion, such as a long upper shadow or a doji at these levels.

Moving Average Theory

The 50-day moving average (approximately $133.50) has crossed above the 200-day MA ($113.00), forming a golden cross that historically signals a bullish trend. The 100-day MA ($129.00) reinforces this alignment, suggesting medium-term strength. Short-term traders may focus on the 50-day MA as a dynamic support level; a retest below $133.50 could trigger a pullback toward the 100-day MA. However, the 200-day MA remains a critical threshold for trend sustainability, and a sustained close below this level would invalidate the bullish case.

MACD & KDJ Indicators

The MACD line (12.00) is above the signal line (8.50), with positive divergence indicating strengthening momentum. A bullish crossover in the MACD histogram supports continuation of the rally. Meanwhile, the KDJ stochastic oscillator is in overbought territory (85.00), suggesting potential exhaustion. However, the lack of bearish divergence between the KDJ and price action (prices still rising despite KDJ flattening) implies the uptrend may persist. Traders should watch for a KDJ decline below 70 as a cautionary signal.

Bollinger Bands

Volatility has expanded in recent sessions, with prices reaching the upper band ($164.06) multiple times. This suggests a strong trend, but the narrowing of the bands during the $149.03–$134.00 consolidation phase indicates a potential breakout. If the price sustains above the upper band, it may signal a continuation of the rally. Conversely, a drop below the middle band ($143.00) could trigger a retest of the lower band ($114.00–$124.77), where volatility may expand again.

Volume-Price Relationship

Trading volume has surged during the recent rally, peaking at $1.19 billion on the $163.96 close. This high-volume confirmation supports the sustainability of the uptrend. However, volume has slightly tapered in the last two sessions, which may indicate waning buying pressure. A further rise in volume during a price consolidation would reinforce conviction, while a volume contraction could signal a temporary pause.

Relative Strength Index (RSI)

The RSI (72.00) is in overbought territory, consistent with the aggressive price action. While this is a cautionary signal, the absence of bearish divergence (RSI not declining as prices rise) suggests the trend remains intact. A drop below 60 would signal a potential pullback, with key support levels at 50 and 40. However, the RSI’s current trajectory implies overbought conditions may persist for several more sessions.

Fibonacci Retracement

Key retracement levels from the $114.7–$163.96 range are at 61.8% ($134.00), 50% ($139.33), and 38.2% ($145.00). The 61.8% level aligns with the 50-day MA, suggesting a probable support zone for a potential pullback. A retest of the 38.2% level ($145.00) could confirm continuation, while a breakdown below the 50% level ($139.33) may trigger a deeper correction toward $124.77.

Backtest Hypothesis

A backtesting strategy could be designed to capitalize on the current setup: entering a long position when the 50-day MA crosses above the 200-day MA and the RSI exceeds 50, with a stop-loss placed at the 61.8% Fibonacci retracement level ($134.00). This approach leverages confluence between trend-following (moving averages) and momentum (RSI) indicators. Historical data from 2025 shows that such a strategy would have captured the recent 33.24% rally, though it would also have incurred losses during prior corrections (e.g., the 13.71% drop in April 2025). Probabilistic success hinges on maintaining the current bullish momentum and avoiding overbought extremes, with a risk-reward ratio of 1:2.5 (targeting a 75% gain from the current $163.96 level).