CRDO Surprising Rise

Almost every morning I look for one stock that is moving up or down dramatically. The reason is quite simple. Rapid changes are opportunity points. It may be an opportunity to buy or to sell, or to do something related to options contracts. That is certainly true this morning.

I hold 100 shares of CRDO in my ROTH IRA that I purchased in March for $99.50 per share. Today it looks like they will shoot up over $155 per share. That is bad news, as I have a covered call contract on those shares to sell them at $126 per share. To make matters worse, the contract expires on Friday.

On the flip side, I also have a cash covered put for 100 shares of CRDO in my traditional IRA with a contract price of $130. That means I may be able to do a contract roll today to earn more cash on that contract. This is the beauty of holding both covered calls and cash covered puts on the same investment. While I might be disappointed to lose my CRDO shares, I did make a profit and I also earned income from the options trades. The person who bought my $126 covered call option will be very happy, and I am happy with my very short-term profit that took less than one month to realize.

The News Item Biggest Stock Movers: CRDO and ALLO

One of the benefits of the Seeking Alpha subscription is that I get a daily email that tells me about the “biggest stock movers” before the market opens. Today CRDO appeared. (Other stocks did as well, and one stock is heading down by 6%: Allogene Therapeutics (ALLO). ALLO, to save you some time, currently operates in the negative for EPS. That isn’t the kind of investment I want to chase. CRDO is quite different and is in a different sector as well.

“Credo Technology (CRDO) +9% – Shares jumped after announcing it will acquire DustPhotonics in a cash-and-stock deal valued at $750M upfront plus potential earnouts, strengthening its position in high-speed optical connectivity. The acquisition of silicon photonics (SiPho PIC) capabilities is expected to enhance Credo’s optical transceiver portfolio amid rising AI-driven data center demand, with the deal projected to be accretive to non-GAAP EPS by FY2027.” – Seeking Alpha

A Quick Look at CRDO

One way to understand the current situation is to look at the Seeking Alpha SUMMARY. Here are seven things to note: 1) Yesterday the shares closed at $134.36. That made me happy, because I have that open cash covered put at $130. 2) The premarket price for CRDO is now looking like it will be above $150 per share. 3) The one-year ROI is stunning. Those who bought shares at $33 are very happy if they held onto their shares. 4) CRDO’s stock is still under the 52-week high of $213.80. There might be more room for it to run higher. 5) Both Wall Street analysts and the Seeking Alpha QUANT ratings are “Strong Buy.” That doesn’t happen very often. 6) Always pay attention to profitability and growth. You want those to be green. 7) Pay attention to how CRDO fits in the herd of competitors, at least according to the QUANT rating.

Positions in Trader+

Here is what the three positions look like in Fidelity’s Trader+. You can see the PUT, the 100 shares and the CALL.

Trader+ Market Scanner for Top % Gainers

Another helpful tool in Trader+ is the market scanner. You can pick from dollar or percentage gainers or losers, most active, 52-week highs, 52-week lows, trading volume movers, or other options as shown here.

Trader+ Time & Sales

Trading volumes and trends matter when trading stocks or options. Trader+ has a helpful tool that is similar to the one in Fidelity’s Active Trader Pro. Clearly CRDO already has a high trading volume at 7:33AM EST (one hour before the official market opening.) That means there is a lot of interest in CRDO shares by short-term and long-term investors.

Two Recommendations

Download and install Fidelity’s Trader+ desktop software. Start to explore it so that you can use the tool effectively and efficiently. The screens I like are the following: Orders, Chart, Quote, Option Summary, Positions, Option Chain, Scanner, and Time & Sales. There are more menu items I need to explore.

Seeking Alpha is a must for anyone who wants to find good investments and avoid bad ones. I cannot tell you how many bad choices I have avoided, but they number in the hundreds. The QUANT rating saves a lot of time in finding good ones and avoiding the garbage.

Credo Technology Group Holding Ltd

Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet, and PCIe applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. It provides HiWire active electrical cables solutions, including HiWire CLOS, SPAN, SHIFT, and SWITCH; optical PAM4 digital signal processors; low-power line card PHY; serializer/deserializer (SerDes) chiplets; and SerDes IP, as well as integrated circuits. The company also offers intellectual property solutions consist of SerDes IP licensing. In addition, it offers predictive integrity link optimization and telemetry; PCIe retimer solutions; and support and maintenance, engineering, and royalties services. The company sells its products to hyperscalers, original equipment manufacturers, original design manufacturers, and optical module manufacturers, as well as into the enterprise and HPC markets. Credo Technology Group Holding Ltd was founded in 2008 and is based in Grand Cayman, the Cayman Islands.

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