Grab the Life Preservers!

Gary's at a worrisome swim meet today, after having dealt with a river of Internet stock questions.
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Are you reading this on early Sunday morning? If so, I'm already poolside, watching the final swim meet of the short course season. But this is a funny kind of meet. Unlike the Age Group Championships, where swimmers had to meet qualifying times to swim an event, in this meet, competitors can only swim an event if their time


fast enough to make the Age Group championships. In other words, all the kids here are swimming their worst events.

And, it's no different with mine: Diana swims freestyle and backstroke. In other words: P.U.! As an example, imagine me going toe-to-toe with




(CSCO) - Get Report

fundamentals. Yeah, it'd be a train wreck. Same story with this meet I'm afraid. Grab the life preservers!

But, enough about that. Let's get to the charts. This week, Internet mania continues: folks either buying, selling or thinking about both. Boy, whatever happened to stuff like


(G) - Get Report



(KO) - Get Report

? Ah, who cares: THE INTERNET ROCKS!

Questions? Send 'em in to along with your full name. Answers? Oh, right, that's my job.

Hi Gary, Thanks for the technical analysis book recommendations a while back. I picked up a couple and found them great reads. What do you see in the EMC chart? Another 6 month triple? William King

Gary, In your 3/20/99 article you wrote that when MEUI gapped down, it "killed any hopes (for now) of a recovery." I related your comment to ORCL and would like your prognosis of its chance of recovery before the next earnings announcement. Also does it have support at its present price? Thanks, Ira Sutton

Gary, Thanks for all the education in TA. In a recent piece, you commented that WB was "boring." Isn't that the general idea behind consolidations? Is there such a thing as too much consolidation and, if so, how long is too long? Thad Faison

Thad, you're absolutely right: A stock in congestion


boring. And


(WB) - Get Report

, as you can see on the chart, has done nothing but move sideways. Now that's not necessarily bad, except that you wouldn't want to do anything with it (unless you had some sort of "sideways" strategy) until it broke one way or the other.

As far as the appropriate length of congestion, I don't have a maximum, but do prefer a minimum of at least 20 days.

Gary, This is a question more about support and resistance than any particular chart, although I will use CGX as a demo. Looking at the chart on daily zoom 1, it appears that the next support is around $43 to $45. But my question is, what is the next level of support? Is it the approx. $32 from this past Oct? Or do you go clear back to Jan 98 at about $36? In other words, how far back do you look to determine support or resistance? Or does it matter? Thanks, Gary Lowman

Dear Gary, OK, I'm new at this online trading stuff. I recently tried to get in on an IPO (iVillage). I got all geared up and sent in my order before opening, but I wasn't sure what to set the limit order for. We all knew IVIL was offering at 24, so I set my limit at 25. Must have been the wrong choice because the stock went zooming past up to 100 that day, then down to 80 without me picking up on it. Is there any rule-of-thumb for trying to guess how much lead to give on an IPO when you think it might be a big run up? Also, could you comment in general on the wisdom of playing the IPO game? Thanks, Bill Settle

Gary, What do you think the outlook is for Pacific Internet (PCNTF). Is it basically an AOL (Asian Online)? Josh Barnes

Josh and Bill,

Let me answer both your questions by looking at

Pacific Internet



Now, what do I see with this chart (or with



for that matter)? NOTHING! That's right, I see zippo. Why? Because there's simply not enough data.

My take on technical analysis is that charts are a reflection of investor psychology. But it takes awhile for that psychology to form. One week, or even six weeks, just isn't enough time.

Now, if you're a fundamentalist and know the company in great detail, then have it. But, let's face it, trying to game an IVIL by getting in at the open is exactly one thing: a crap shoot.

Hi Gary, I read Cramer for entertainment, Greenberg for annoyance and you to make money. So now my question: I hold too much of PLAT which I've been buying and holding for years. So now I wrote far out calls on 25% of my position on Friday, sold 25% and have half left. Any opinions on near and end of year performance? Arnold Melamed

Gary, I went into ISSX the day it IPOed and recently it has taken a good jump. Where do you think it is going? Should I grab my 115% and run or ride it along? Thank you, Pat Ducale

What do your charts say about everyone's favorite, My charts say "Short for Sport." So I'm short @ 137 3/8. Will I make some weekend money or lose my shorts? Please advise... Thanks, Louis P. Kellenberger, Jr.

Hi Gary, I enjoy your columns and was wondering your take on the chart? As I am new at Internet investing and I love it as I only have made $$ -- MOST of the time anyway. Sincerely, T. Jones

Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication he had no positions in the stocks mentioned, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith also writes Technician's Take, which appears every Monday, and Charted Territory, which runs Wednesdays.