Gary B. Smith Yahoo! Chat Transcript

Gary B. Smith chatted on Yahoo! March 16 at 5 p.m. EST.

Ellen: And now for more market advice than you can shake a shillelagh at ... Gary B. Smith!

gsmith4: I am here, I am psyched. Fire away!!

[e-mail] asks: Do you re-evaluate your open positions at the end of each day and place a market sell order for those that wouldn't qualify anymore (dropoff in volume since you bought) or do you simply wait to one of your stops is hit?

gsmith4: I always wait. I've actually become better and better at that.

sunnydog2k asks: Gary, can you report on progress with "sideways" market methods?

gsmith4: See my column tomorrow!! Stop loss.

Ryco1 asks: If you could only place one order, after your original order was filled, would you place a stop loss order or target sell order?

gsmith4: Stop.

lmkulchytsky asks: How does AOL look from a technical standpoint (both short and long)?

gsmith4: Looks good both ways!

bigb19_55 asks: Gary, I enjoy your columns at TheStreet.com. Please explain to me what you see with NITE.

gsmith4: NITE looks pretty good right now. Looks like it's either breaking out or at least wants to break out.

[e-mail] asks: I have found that on many occasions it pays to wait a day or so to buy after a stock breaks out of congestion since it may be a false breakout. Have you found this to be true?

gsmith4: I have tested that and found it's always better NOT to wait.

feihin asks: Hey Gary, What size v makes you dismiss a chart? The Meat Man

gsmith4: I generally don't like a stock that's shot up more than 10% or so from its low.

sunnydog2k asks: How's your recent success with longs vs. shorts lately?

gsmith4: As usual, much better on the shorts!

lmkulchytsky asks: If the market were to correct as all the pundits seem to be forecasting, where would the bottom be? (technically).

gsmith4: Oh, I don't think it would go down much past 9250.

Ryco1 asks: What is the best strategy for buying at the price you want in the morning, especially with the gaps up?

gsmith4: Well, for my methods I still think market order is the best. Better fills with limit orders, but you miss some big winners.

code5361 asks: Whats your middle name?

gsmith4: Blake!

[e-mail] asks: What are your current recommendations on software packages and data services?

gsmith4: Same as always: for eod I like Worden bros. tc/2000. It has data and charts included. Best scanning software out there, I think.

lmkulchytsky asks: Do you have anything good to say about the advance/decline line?

gsmith4: Zero: it scares the heck out of me!

[e-mail] asks: I went long SONO on 3/10 at got a price of 14.5 and got killed quickly. This stock had a clear breakout on heavy volume. What's up with this stock!

gsmith4: One big prob: way too thin. Watch those; they'll kill you.

amby_h asks: Hi are you married?

gsmith4: Happily!

sunnydog2k asks: Gary, does congestion always have to have flat tops or can an upslope or downslope work out?

gsmith4: I prefer the flat tops, but a slight upslope or downslope is fine. But, I do mean slight.

k9pete_98 asks: How about a live online co like DTNIQ or Windows on Wall Street?

gsmith4: If you mean for software packages, Wesson has tried WOW. Pretty good package, but just doesn't scan as fast as TC/2000.

hawkinsb99 asks: I have had a nice run on TLAB after consolidating in the mid 70s, looking a bit extended here, agree/disagree?

gsmith4: No, I still think it has some legs left in it.

coors69_69 asks: Gary: I'm 21 should I invest in internet stocks for the long run or should I stay with blue chips?

gsmith4: Hmmm, good question. Let's see, if I was 21 my conclusion would be that the internet stocks are the blue chips. Go with them.

wuzup67_98 asks: What is your favorite part about stocks?

gsmith4: Making Money!!

kewgardens98 asks: Do you think the oil sector will recover?

gsmith4: I think some of it has lately, like SLB. I've liked that area since last chat, but not so much lately because they've moved up quite a bit.

epsconvair880 asks: I bought Netscape at 43.00 should I sell now or merge into AOL at 0.9 per share?

gsmith4: The chart actually looks good. But so does AOL. Probably go with the AOL deal.

jkcfp asks: Is Kathrine there?

gsmith4: Ah, Yes! She's entering my charts until 5:30, then it's Diana's turn.

jvita_1 asks: Gary, What is the minimum average volume for a stock you will trade?

gsmith4: 300K.

boots123 asks: Analysis recently of WAVX? From 4-14.75 on no news except or NASDAQ relisting application being processed?

gsmith4: Pass, I can't find that chart!

capernum1 asks: How many trading days of congestion would you consider a minimum?

gsmith4: 20 or 25 I like.

angel_23220 asks: What are your thoughts on BYND now that it broke out?

gsmith4: Had a bad day today. I think it's still in congestion.

lmkulchytsky asks: Do you use anything other than technical analysis to identify potential targets, market turns, etc. (i.e. McClellan Oscillator, VIX, etc.)?

gsmith4: Zippo!

[e-mail] asks: How do you deal with this situation: You place a market order to long a stock at the open, there is a big gap, the stock is bought for you, then the price just slides back to yesterday's close costing you several points or more ?

gsmith4: Well, what happens is that my broker usually gets a floor look and let's me know if there's going to be a huge gap I then sometimes pass. But, if I do get in and it drops, I just take my lumps.

Mad_Dog59 asks: Hi Gary. Which of the 800lbs gorillas in the telecom equipment industry, LU or Cisco, do you think is better positioned now that they will at least partially be in direct competition?

gsmith4: Hmm, close call and the charts are about equal. Personal pref: CSCO.

feihin asks: Gary, what dollar price range indicates a channel or just an unstable stock?

k9pete_98 asks: Gary, do you prefer certain times of the day to play or stay away from the market?

gsmith4: I'm always in on the open, and close when my target or stop is hit. Time of day is academic.

kewgardens98 asks: Why would a stock lose ground when the company offers to sell more shares for example ZOOM?

gsmith4: Each share is worth a lower percentage of the company (i.e. dilution).

boots123 asks: Newbie question, not familiar with congestion, definition please?

gsmith4: In short: a stock trading in a range between a set high and set low.

whitebp asks: Is your trading purely mechanical now or are you using human intervention to refine your picks?

gsmith4: Hmm, have you been spying on me. Have to say almost 99% pure mechanical.

ccopp asks: What do you think of DELL

gsmith4: I still think it's moving sideways recovering from that downdraft. Unsure of the next direction though.

k9pete_98 asks: Gary, how can one get started as a SOES, ECN type trader?

gsmith4: First thing I'd do is look at www.elitetrader.com. Great info on Level II, etc. Then next stop is to find a "Level II" type broker. I'd also check out some of the SI chat threads.

capernum1 asks: When you say 300K minimum is that average volume?

gsmith4: Yes.

coors69_69 asks: William O'Neil said in his book not to invest on companies that have over $1 billion shares outstanding ... what do you think about that?

gsmith4: I ignore that. But, I've never studied it. Remember, he's looking for 20% gains. Me, only 5%.

angel_23220 asks: Where do you usually place your stop after you buy a stock (8%-10%)?

gsmith4: No, 6% below my fill.

uttbani asks: Opinion on BRCM chart please?

gsmith4: Umm, don't really like it. Moving sideways and that top in early 99 looks awfully far away.

bigb19_55 asks: Well speaking of AOL it's at a new high would you get in today or wait for a dip?

gsmith4: If you're long term, I'd probably get in now. If short term, I think it's a little risky here.

k9pete_98 asks: Gary, why not use Level 2 quotes to see the gaps?

gsmith4: I guess I could. But, unless it's something nutty like enmd, I generally ignore the gaps anyway.

hpeter43 asks: What is a good free site to get technical analysis on a stock?

gsmith4: I like both www.clearstation.com and www.bigcharts.com.

boots123 asks: Any favorite OTCBB stocks recently?

gsmith4: None. Never trade those. TOO thin!

k9pete_98 asks: Gary, can we have your thoughts on day trading schools?

gsmith4: I think some can be good, but I have no personal experience with them. In general, I'd be suspicious of a "school" where the incentive for them is for you to trade a lot....

hawkinsb99 asks: How do you set your exit points, I tend to exit early (i.e, ready to dump TLAB)?

gsmith4: I always exit at 5% gain. Always.

yawanna39 asks: Hi Gary, is Magellan a good 401k fund?

gsmith4: I have my money there!

[e-mail] asks: You said that SONO was "way too thin"- what do you mean by this?

gsmith4: Trading vol. Today for example it traded 630 shares. If I traded SONO I'd BE the market!

mkulchytsky asks: Are ABTX and PSFT still good short candidates?

gsmith4: PSFT is definitely not (I talked about that in this weekend's column. ABTX looks better, but still to risky to short.

jadams_35 asks: What the best book on tech analysis?

gsmith4: I like "Technical Analysis of Stock Trends." (Edwards and Magee.)

feihin asks: How much of range can be considered congestion versus a volatile stock?

gsmith4: I don't know: totally dependent on the chart.

coors69_69 asks: How difficult is it to get a job in Wall Street? MBA? Ivy league?

gsmith4: Stumped!! I work in Bethesda MD!

Ryco1 asks: Do you know any online brokers that allow both a stop loss order and a limit sell order at the same time?

gsmith4: Online? No, although check our Wall Street Access I think. I use Yamner and Co. but they're not online.

Mad_Dog59 asks: Since AMD seems to have the amazing ability to consistantly screw up there own business plan, what do you see for Intel. Might they eventually find themselves in he position MSFT finds themselves in now, due to there market dominance?

gsmith4: I think Intc has a tough road to hoe. Looks very shortable at 125.

feihin asks: Gary, you still using 30 dollars as min. on short and long ?

gsmith4: Yes.

sunnydog2k asks: You can get a feel for the open by checking the bid/ask on Nasdaq stocks, but what can you do about NYSE stocks other than check with your broker?

gsmith4: That's about it: have a good broker.

jberger102358 asks: Gary, Did you take any of the airlines today?

gsmith4: Nope, passed on those. Thankfully...

capernum1 asks: I was holding T for long term, but I thought the chart looked bad and liquidated the position this AM. What is your opinion?

gsmith4: A wise move, grasshopper.

lmkulchytsky asks: Are you seeing more short or long candidates lately (using IBD screening)?

gsmith4: I'm not using IBD, but seeing an equal number in each area.

jkcfp asks: Our GBS club liked KO, what do you think?

gsmith4: I am long KO!

cagze2 asks: How come the Dow didn't break 10,000 today, although it was completely possible today?

gsmith4: You mean stay above 10K? Guess folks were looking to take profits!

hawkinsb99 asks: Any thoughts on EMC?

gsmith4: Nice uptrend, that's for sure.

[e-mail] asks: Why do you use 30 as minimum price?

gsmith4: My methods seem to break down a bit with stocks under that price range. Probably due to my stop and limit targets.

ghillct asks: Gary, to learn better from our mistakes I thought maybe you could do a regular feature on trades that just don't work out. Thought maybe we'd give an award to the stock with the best setup, but then doesn't perform. Call it the Curtis Strange award.

gsmith4: First of call, Curtis Strange hates my guts. I dissed him when I was with SI. Second, I have no losers!! Kidding - good suggestion.

hk111 asks: Hey neighbor! How do bonds look?

gsmith4: Hey, is that Howard!! This great guy actually is my neighbor. But HK: bonds are B-O-R-I-N-G!

jkcfp asks: No swimming practice for Kathrine and Diana?

gsmith4: Tomorrow at 5:30 a.m. at the Holton Arms pool if you're awake!!

hawkinsb99 asks: AMZN seems to be lagging behind internets lately, could almost be considered congestion here, play if breaks to upside?

gsmith4: Yes, I think so. In fact, could be soon.

kofax32 asks: What do you think of ROWE and electronic commerce stock generally?

gsmith4: Rowe just started trading so not enough info for me to say.

angel_23220 asks: What indicators do you use to screen your stocks (if you answered this in a previous column, please reference)?

gssmith4: Answered many times. See the TheStreet.com archives or email me tomorrow for specifics. Happy to help.

boots123 asks: Why exit at 5% gain and 6% loss?

gsmith4: Ah, that old question: has to do with expectancy. See my recent col on methodolgy developement for details.

Mad_Dog59 asks: Gary, while PepsiCo has spun off there restaurant operations and bottling concerns, the stock still cant seem to get past 40 -- where do you see it going short term?

gsmith4: I like this chart: I think it has a good shot to head back to 42, and then on up. But, it has to break about 40.25 first.

coors69_69 asks: Tell me what you think of YHOO and CMGI?

gsmith4: I think CMGI has had its heyday. YHOO is consolidating. Could go anywhere right now.

k9pete_98 asks: Gary do you trade options if so which ones, ie stocks or indexes?

gsmith4: I don't trade options, basically because I stink at them!

capernum1 asks: In your current series your discussing the development of a personal trading system. Where can an individual locate different trading systems to develop as your own? I've read Cooper and am reading Van Tharp.

gsmith4: Two good places to start. I'd also look at O'Neil and some of the list on TheStreet.com.

pychi11 asks: Would you buy telecomms at these prices?

gsmith4: Without a specific I can't say.

d2trade asks: Hi Gary, what are your long-term thoughts for ATHM?

gsmith4: I think it wants to head back up if you can believe it. Could go to 150.

hk111 asks: Ok, no bonds. Boring, how about MWD chart?

gsmith4: Great uptrend, HK. But, you're not partial are you.

bigb19_55 asks: Would you consider QQQ in your charts

gsmith4: Not now, just started trading. But, yes, eventually I would trade it if it looked right.

jccopp asks: Have you ever traded the range of the congestion, if it's greater then 5%?

gsmith4: Boy, that's a good one. I guess I might have and not even noticed.

jkcfp asks: Gary, are you happy with your new IBM lap top?

gsmith4: I LOVE my laptop. I bring it everywhere. Having some techno-weeny problem with the "hibernation" feature, but other than that my best purchase of '99.

Exocytosis asks: Was the NSOL break out yesterday look good to you?

gsmith4: Terrific. Wish I had that one!

hawkinsb99 asks: From commodity experience, I know there are guys who hunt for stops and then run the other way. Does this happen less is stocks?

gsmith4: I know it seems to happen to me sometimes, but I bake that aspect into my trading.

cjl1201 asks: Long KO? What is your new high criteria these days?

gsmith4: I removed the 52-week criteria last dec. Now, just look for breakouts from congestion.

Ryco1 asks: Ziff-Davis (ZD) recently broke out. How does chart look longer term?

gsmith4: Hey, I called that one!! I think the chart looks very solid right now.

edwineb_98 asks: Gary, what do think of OSSI? It has a very tight consolidation. Also, what about PRKR?

gsmith4: One at a time! OSSI looks fine; PRKR is pulling back to its breakout area -- if you like to buy on pullback's now's your chance.

capernum1 asks: How far from a trendline will you pass on a short or long?

gsmith4: On shorts it doesn't matter. I'll short a stock that fell 50% if the chart looks good. On longs, I pass if it's more than 6% above resistance.

stoneham1 asks: Mr. Smith, how can you believe that anyone can predict the price of a stock based merely on a chart, as with technical analysis?

gsmith4: I know, zany isn't it!!

dawnmeg asks: Your read please on QCOM?

gsmith4: I think it's a bit far from any support. Looks scary!

Mad_Dog59 asks: Gary, this probably won't be a popular opinion, but I feel shopping online is a VERY over blown concept -- appeals to a niche, sort of like Saturn's approach to pricing cars. Shopping is a social experience for many, which you just can't get online. Any thoughts?

gsmith4: Hmmm, I kind of like shopping online!

Exocytosis asks: How does the EBAY chart look, can it break its old high?

gsmith4: Can it? Of course. Will it? Wow, tough to say. I'd give it a week "probably."

yawanna39 asks: What stock did you make a fortune on?

gsmith4: Hah! Still waiting for that ONE stock to retire on!

Ryco1 asks: Once you sell a stock at your 5% target, will you get back in it, if it contiues up?

gsmith4: No, only if it goes into congestion.

[e-mail] asks: So you never, ever place trades other than at the open?

gsmith4: Nope. I am so boring, I know.

jvita_1 asks: Why did you not take NSOL this a.m.?

gsmith4: I used discretion: just too volatile for me.

jkcfp asks: Gary, this chat is great, you actually answer (swim mom in Texas).

gsmith4: Hey, that must be Karin. Yes, these chats are fun!

Exocytosis asks: Does T look like it has bottomed?

gsmith4: Bottomed? I'm unsure. I guess I'd at least have a stop in.

coors69_69 asks: What do you think of online brokerage like AMTD?

gsmith4: I used them for quite awhile. I no longer use them. 'Nuff said.

mattgundersen asks: Gary, you recently talked about the sideways action of Feb/March preventing you from profitting. Has your recent reader poll of trading methods given any insight to new methods/styles?

gsmith4: Quite a few. I'll have a complete review in my column tomorrow. Of course, I'm using the best ones myself!

jccopp asks: How many longs/shorts are you now seeing per day?

gsmith4: I'm going along at about 2 or so on both sides, 4 in total.

Exocytosis asks: Any thoughts on AWRE, its one of Jim Seymour's favorites?

gsmith4: Seymour is the King. And, I like AWRE right here. Better if it can take out its old high.

jadams_35 asks: Gary are you a chartest or a medicine man?

gsmith4: I am the ultimate Voodoo Guy!

feihin asks: Are you long DLJ?

gsmith4: Nope. Wish I was, though.

[e-mail] asks: Do you watch CNBC or does that make you nuts, they drive me crazy!

gsmith4: I watch it sometimes when I'm working out after 4. Never during the day.

bigb19_55 asks: Gary besides the technical aspect of the market do you know anything about the new internet2 system with project oxygen?

gsmith4: I don't. Bet my wife does though: that's her domain.

hawkinsb99 asks: NOK.A looked a little heavy at 150 and has pulled back, what do you think here?

gsmith4: I think it looks fine. Just moving sideways.

capernum1 asks: OK, I get the long but if a short is 50% below the trendline must that be a one day break only?

gsmith4: Yes, I'd never take it if it had moved down to that point over a period of days. Good catch!

Exocytosis asks: If the fundamentals look good, and a stock looks like it is about to break out of congestion, do you ever get in early?

gsmith4: I always think about it. Many times being burned has taught me a lesson though!

angel_23220 asks: Any group/sector trying to make a turnaround from the bottom, i.e. oil sector?

gsmith4: Yes, building materials if you can believe it.

sunnydog2k asks: Gary do you peek before the close to see if a position is near a target, then close it out?

gsmith4: Oh, gosh yes: I peek all day! And, yes, every once in awhile if my target is say, $46 and it keep trading at 45.9375, I'll yank it. Not often though.

whitebp asks: How many scans do you have on average every day? Long or short.

gsmith4: If you mean how many charts does my scan return? About 25 or so.

Exocytosis asks: How do INTC, MSFT, and CSCO look, can they make new highs near term?

gsmith4: INTC looks DEAD. The others look fine though.

vipmustang asks: Where is Novell heading?

gsmith4: Seemingly straight to the moon.

[e-mail] asks: Using your 5%, 6% strategy, how long do you hold your average position?

gsmith4: It's been about 5 to 7 days lately.

k9pete_98 asks: Do you play golf?

gsmith4: Do I play golf? Hey, look up the Texas State Am. result in 1991 and see who finished 41st!

Mad_Dog59 asks: Gary, many people have very diverse opinions on Merck -- great track record but short term problems due to patent expiration. Where do you see it going?

gsmith4: Higher.

jkcfp asks: How is Nancy with her new job? Karin

gsmith4: Nancy is doing great: her company does their IPO end of March. Stay tuned!

coors69_69 asks: What's wrong with DIS?

gsmith4: Nothing. Just moving, albeit annoyingly, sideways.

feihin asks: Gary, what is your time limit on stocks. Is that calendar or trading days?

gsmith4: Trading days: 20 days.

Exocytosis asks: I have learned so much reading your column, glad you are with us. How has your performance been so far this year?

gsmith4: Thanks! Performance is just okay: up about 10%. But, better than I was doing in January.

kstill asks: Do you have an opinion on RXSD ... target?

gsmith4: Just broke out today, right? Could go to 25 it looks like.

wvogel asks: What's your short term view of YHOO?

gsmith4: Neutral.

lwattslwatts asks: How much weight do you put in MACD charts?

gsmith4: Zippo.

pychi11 asks: Gary, if a stock has weak fundamentals but great chart, do you buy?

gsmith4: Fundamentals? What are those?

[e-mail] asks: How do you handle your long term investments -- TA or fundamentals?

gsmith4: I have all that stuff in 401K. So I guess fundamentals.

angel_23220 asks: Don't really want to feed your ego, but want to say that I really enjoy your columns and you are one patient guy to answer all our questions! Thank you.

gsmith4: Thanks -- my ego needs constant attention unfortunately.

Exocytosis asks: Does AOL's latest rally look healthy? so much for going sideways or down, hehehe...

gsmith4: Gloater!

SteveKross asks: Gary, your thoughts on WB?

gsmith4: I love "Felicity." As for Wachovia, it's dull!

marketrage asks: Any opinion on Conexant?

gsmith4: Nonexistant.

feihin asks: With limited capital, do you recommend a shorter holding period?

gsmith4: From the aspect of having your funds "work more" yes.

TSCEllen: And the question we're all dying to know ...

wuzup67_98 asks: What color socks are you wearing right now?

gsmith4: Boy, that is a good question: I just had Diana look and the answer is ... Blue!

TSCEllen: Thanks for another great chat Gary!

gsmith4: This was a great, great chat, so thanks all! Also, a special thanks to Ellen who is simply the best And also my two daughers: Katherine and Diana who helped me by keying in the charts. I'll be back in April for another chat. Until then, read my stuff on TheStreet.com!

TSCEllen: Don't miss TSC's next chat on Yahoo! Tracy Byrnes and Martin Nissenbaum will be taking on all of your tax season questions, March 23 at 5 p.m. EST. If you would like more info on TSC chats, send email to [e-mail]. See you next week!