Take a look at the 1-year chart of Cepheid (NASDAQ: CPHD) below with added notations:
CPHD had been trading sideways for the first part of 2015, and then the summer drop came. After the decline, the stock started trading sideways over the most recent three months. While in that sideways move, the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
The CPHD rectangle pattern has formed a resistance at $38 (red), and a $30 support (green). At some point the stock will have to break one of the two levels.
The Tale of the Tape: CPHD is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $30 or on a breakout above $38. The ideal short opportunity would be on a break below $30.