Charts showing these 4 areas of support in the link below:

http://thetechnicaltrader.net/forum/inde...
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We usually are not trying to catch a falling knife, but sometimes when fundamental analysis shows there could be good reward then if technical factors line up then things might be worth looking at. In the case of STEC, a fast growing SSD company (solid state drive), massive EPS growth brought about a 10X price increase this year, but it has now fallen about 70% from its peak largely due to some uncertainties relatated to high levels of inventory of their product with their largest customer, EMC.

Anyway, the technical argument right now is as follows:

1.) At Gap support from large gap in May
2.) At ascending trendline support from Feb 09 - Mar 09 trendline
3.) At descending trendline support from descending channel that STEC has been trading in since July/Aug until now
4.) At exactly 78.6% Fib retracement from start of move mearsured from 5.2 after the basing at beginning of the year until the peaks in September.

It may also go without saying that the chart is oversold, the daily stochastic and weekly stochastics are as oversold as they have ever been, so a bounce is also possible due to this.

To me this all says the stock is ready for a bit of a bounce, not that it wont eventually possibly fill some of the lower gaps, as there is still the channel it is in and the possibility of an eventual 100% Fib retracement. However, seems to me that it will take further negative news for that to happen, and that with any positive news this could be the actual bottom and squeeze hard.

The two charts below show these points. You have to scroll to the right on the TOS chart to see the 78.6% Fib line intersecting current price (had to use TOS since Etrade Fib lines dont show the 78.6% line, that is why I didnt put it all on one chart).