What's behind Credo Technology's latest 3.6% stock pullback?

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Credo technology slides 3.57% today

Highlights

Credo Technology projects October-quarter revenue of $525 million to $535 million after 115% revenue growth in the previous quarter.
MKP Capital Management L.L.C. increased its stake by 9,550 shares in the third quarter, reaching 20,000 shares per SEC filings.
Shares of Credo Technology trade below key moving averages with bearish momentum; expected five-day range is $119.87 to $152.91.

Bullish revenue guidance and institutional buying amid persistent selloff

Credo Technology recently guided October-quarter revenue to a range of $525 million to $535 million following 115% revenue growth in the prior quarter. MKP Capital Management L.L.C. was reported to have increased its stake in the company by purchasing an additional 9,550 shares during the third quarter, bringing the total to 20,000 shares according to SEC filings. These developments reflect ongoing institutional engagement, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees ongoing weakness in Credo Technology Group despite strong revenue guidance and increased institutional positioning. The sustained move below the 20-, 50-, and 200-day moving averages indicates entrenched bearish sentiment. Technical momentum remains negative, and price is near support at $119.87. Institutional engagement has failed to shift the trend. "Despite positive news flow, persistent technical weakness and heavy selling pressure make CRDO unattractive at current levels."

Viktoras Karapetjanc, expert at Traders Union, highlights that robust institutional activity alongside strong revenue growth underscores the bullish structure for Credo Technology. He views the consolidation phase as a potential foundation for renewed inflows and forward momentum. While near-term selling pressure exists, the broader setup offers multiple opportunities for investors tracking this sector. "I believe the recent institutional buying and impressive revenue trends signal further growth ahead for CRDO."

Sholanke Dele, market strategist, notes that the stock's drop after upbeat guidance signals a lack of investor confidence and growing skepticism. He is wary of heightened volatility near session lows, especially with technical resistance and weak momentum. The news on institutional buying has not reversed the broad negative sentiment. "For now, risk remains skewed to the downside and I would stay defensive on CRDO."

Bearish momentum persists as price tests key support zones

Credo Technology is trading below its 20-day ($152.83), 50-day ($173.42), and 200-day ($180.79) moving averages, indicating persistent bearish momentum from both short- and long-term perspectives. The nearest support is at $119.87 and resistance stands at $136.61, with the Ichimoku Kijun at $168.01 further underscoring a strong bearish bias. Momentum indicators mostly point to continued weakness: both MACD and ADX register negative momentum, RSI and CCI are neutral, Stochastic RSI is overbought, and intraday action is dominated by buyers according to Bull/Bear Power. The Awesome Oscillator remains neutral. The price is currently near its session low with volatility at 8.37% and pressure remaining after the open.

Earlier, analysts noted that Credo Technology remained under persistent selling pressure driven by institutional reshuffling and broadly bearish technical momentum. The current article strengthens this negative outlook by highlighting that, despite strong revenue guidance and renewed institutional buying, sustained bearish trends dominate and traders should monitor the $119.87 support for signs of potential downside acceleration.

Source of Data: CRDO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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