You want to cut slightly above the second notch. At the base where the spike comes out you'll see the 1st then above it another then cut. I have reccommended miracle grow orchid mix before in that it has specific food that is amazing in reviving and regrowing orchids. I don't know if you have access to water beads but I would reccommend them in this case since providing moisture can make the fungus grow and spread. These actually release moisture into the soil without overwatering.