Technical Outlook: CFW, PSDV, CMO, SLTM

While the overall market has been up and down today, a few stock charts are looking a little more decisive. Those stocks are pSivida Corp. (PSDV), Solta Medical, Inc. (SLTM), Cano Petroleum, Inc. (CFW), and Capstead Mortgage Corp. (CMO). Let's take a more thorough look at each one's chart, and what's likely to come next.

It shouldn't be a total surprise Solta Medical, Inc. (SLTM) is deep in the red today. The stock's been pressing its luck since last week when it crossed above a major resistance line and became overbought in the process.

As for where the selling might stop, this doesn't appear to be a case of just one rough day. The selling volume behind the demise of Solta Medical is very heavy, and there's no support anywhere in sight. In fact, SLTM may not find a floor until it's back at the July/August base around $1.25. That's a decent short swing trade in the meantime.


There are a couple of important trading ranges for Capstead Mortgage Corp. (CMO), but the two line were most interested in are the inner support and resistance line... the ones that are on an intercept course (and the ones CMO shares are back inside as of today). We bring them simply to point out there's a bastion of hope for Capstead Mortgage - as long as $13.39 holds. If not, CMO may end up falling back to the lower one at $12.03. Just bear in mind each of those support lines rise a little each day.

The one the bulls have working against them is the island reversal from mid-September. Those are pretty intense reversal patterns, and usually develop follow-through. The heavy selling volume is just a little extra 'umph' for the bears. None of it bodes well for CMO.


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If you though the last week and a half were rough for pSivida Corp. (PSDV), you ain't seen nothing yet. If the support line at $4.10 breaks (and we think it will), PSDV may slide all the way back to $1.46. The current price of $4.30 is already under the first of the key Fibonacci retracement lines.

We could explain what's going on with pSivida with some excessively technical jargon, but the simple theme is this.... the higher they fly, the harder they fall.

The volume on the way down has at least been as strong as it was on the way up, and we anticipate PSDV making a very symmetrical mountain-shaped chart following its apex at $6.25.

Cano Petroleum, Inc. (CFW) may not be setting up a monster move, but it's low hanging fruit (the reward outweighs the risk).

Up until today, the bulls could have argued that the pullback from the September peak of $1.28 was being made on lower volume. Today's 8% selloff from Cano Petroleum, however, has inspired a large number of sellers - volume is up quite a bit. 

The only downside to this short/pullback possibility is that support for CFW is waiting around the $0.60 mark. Not that the trip down from $0.92 to $0.60 would be a bad trade, but it would be even better if Cano Petroleum smashed through that floor. Take it one day at a time though.

If you'd like to know of any changes in our opinion of CMO, SLTM, CFW, or PSDV (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered 2 to 3 times per week.