Credo Technology Surges 8.34% as Technical Indicators Fuel 11.93% Two-Day Rally

Credo Technology (CRDO) has surged 8.34% in the most recent session, extending its two-day rally to 11.93%. The stock’s price action over the past year reveals a volatile trajectory, with significant swings between key psychological levels. This analysis evaluates technical dynamics across multiple frameworks to assess potential near-term implications.
Candlestick Theory
Recent price action forms a strong bullish continuation pattern, with a two-day rally piercing above prior resistance at $142.97 (Dec 18 close). The Dec 19 session closed at $150.13, forming a large bullish candle with a body spanning $136.57 to $151.42, suggesting aggressive buying pressure. Key support levels to monitor include $134.13 (Dec 17 close) and $129.75 (Oct 14 close), while resistance is now at $151.42 and potentially $157.98 (Dec 10 high). A breakdown below $134.13 may trigger further retesting of the $123.87–$133.49 consolidation zone.
Moving Average Theory
Short-term momentum is confirmed by the 50-day MA (calculated at ~$140.50) crossing above the 200-day MA (~$125.00), indicating a bullish trend. The 100-day MA (~$138.00) provides intermediate support.

The stock currently trades above all three averages, reinforcing an uptrend. However, the 200-day MA may act as a critical floor if volatility increases, as seen during prior corrections in October and November.
MACD & KDJ Indicators
The MACD histogram shows positive divergence, with the line above the signal line and rising, suggesting sustained momentum. The KDJ indicator (Stochastic) indicates overbought conditions, with %K and %D converging near 80, signaling potential exhaustion. While this may hint at a short-term pullback, the lack of bearish divergence in MACD reduces immediate reversal risk. Confluence between bullish momentum and overbought RSI (discussed below) suggests caution but not a reversal.
Bollinger Bands
Volatility has expanded sharply, with the stock trading near the upper band (currently ~$151.50). The 20-day standard deviation has widened to 8.5%, up from 4.2% in mid-December, reflecting heightened trading activity. A contraction in band width (e.g., below 3%) would signal a potential breakout, but current positioning near the upper band supports continuation of the rally.
Volume-Price Relationship
Trading volume on Dec 19 spiked to 9.6 million shares, a 76% increase from the prior session, validating the price surge. However, volume remains below the 30-day average of 6.8 million, suggesting the move is still driven by concentrated buying rather than broad participation. A sustained increase in volume above 10 million shares would strengthen the case for a breakout.
Relative Strength Index (RSI)
The 14-day RSI has surged to 72, entering overbought territory. While this may signal a near-term correction, historical context shows RSI frequently exceeded 70 during the October–December rally without immediate reversal. A close below 60 would confirm weakening momentum, but the current divergence between rising price and flat RSI suggests caution.
Fibonacci Retracement
Key Fibonacci levels derived from the Oct 14 low ($129.75) to the Dec 19 high ($151.42) include 61.8% at $141.00 and 78.6% at $150.50. The recent close at $150.13 is near the 78.6% level, which may act as a short-term resistance. A break above this could target the 100% extension at $156.30, while a pullback to 61.8% would test buying interest.

Confluence of bullish momentum (MACD, moving averages) and overbought conditions (RSI, KDJ) suggests a high probability of consolidation or a test of $156.30, but risk-reversal indicators (Bollinger Bands, volume) imply volatility could persist. Divergences between RSI and price action warrant monitoring for early signs of distribution.