Looking for a Nice Cup-and-Handle Tattoo

Plus, more on Level II quotes and lots of nonpermanent charts.
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The first time I wrote this column, I completely forgot to tell you where to send questions (

technicalforum@thestreet.com). And then when I went back to add it, there was no logical place to sneak it in. So, here it is, shoved clumsily into my opening 'graph. Seriously, I should be drummed out of the Writer's Guild!

Now, where was I . . .

As a respected journalist in the field of finance, I try to position the whole Gary B. Smith Experience as one of serious, studious study. We may be many things, you and I, but one thing we are not is flaky!

Therefore, I was shocked -- shocked! -- to get this missive from

TSC

reporter

Dave Gaffen

:

Hey Gary, I wonder if you've ever heard of anybody getting a tattoo of a stock chart on their arm for whatever reason? Or if any of your readers have ever done it or heard of it? If so, let me know. I know this sounds totally weird. But just curious. -- Dave Gaffen

So, there you have it. I guess Dave views our little party as the type that would condone having tattoos

of any type

displayed on our bodies. (Truthfully, I have a large battleship across my chest, but a stock chart? Yeah, right!) Anyway, I suppose we've been found out. All stock chart tattooists (tattooers? tattoophiles?), please let Dave know.

On a different, nonbody-art topic, Level II info continues to stream in. (Get it?) This from reader Brian. Neat stuff:

Gary, I just read your article in which a reader mentioned how Level II quotes help him with trading, and how he uses the E*Trade (EGRP) quotes for this. I just want to mention that you and your readers you can get it for free at the following Web site: http://home.adelphia.net/~mystifier/island_real.htm I don't know if it displays the same information as the Level II quote screen from E*Trade, but at least it displays the quantity and price of the stock, and from my recent observations, it also shows a stock's direction.

Note: I checked and it's for real. The only catch? Not all market maker quotes are displayed, just

Island

quotes. Still, the price is right.

And, one more word on Level II

Gary, I'm a full-time daytrader, working from home with Level II. I even run the chat room for the nationwide organization, Day Traders USA. We base many of our calls and strategies on intraday and daily charts. I must agree with your reader who wrote that Level II is a distraction, but I would add that it's also an expensive confirmation. I have found that Level II confirms the charts. When I see a bottom or top approaching based on what I see on the intraday chart, very soon the market makers start lining up in depth at that price, but the chart told me it would happen significantly in advance of Level II. I often know where these bottoms and tops will be the night before! Unfortunately, I have a great deal of trouble convincing our members to take the time and effort to learn basic technical analysis before jumping full time into daytrading with their life savings. The universal response I get is that it's "too much work." They often ask me if they should pay $5,000 for this or that daytrading course, yet refuse to invest $200 in books and charting software and take the time to learn the most basic skills. Chart reading is clearly not "where the action is." But that just leaves more on the table for those of us who understand and appreciate the value and importance of old-fashioned chart reading. By the way, I am always recommending that our members subscribe to

TheStreet.com

, just so they can have access to your columns, but again I see that glazed-over look in their eyes. Oh, well. -- Richard LaPoint

Richard,

Are the glazed eyes before or after they read my column?

Not a Short Story

Gary, Could you revisit the Sandisk (SNDK) chart (last analyzed June 5)? My one bad trade this month turned out to be a doozy. I was hoping to capitalize on a postearnings-related selloff (see last summer's chart) and shorted a train. Today's decline on strong volume on an up Nasdaq day may mean that the momentum is cracking, and if I can hold on a bit longer and maybe average up, I should escape without too much damage. However, it appears this stock has had little correlation with the overall market recently. What do you think? -- Steve Reader

Now Here's a Short Story

Gary, Please give me your opinion on two stocks: Unify (UNFY) and Symbol Technologies (SBL) ? Unify was mentioned a few times by Herb G. Looks like every time it gets to around 12, it's a buy. Is that an extended base? Symbol Tech is a local company here in Long Island, N.Y., that's always in the news. Thank you in advance for your help. -- Bill Park

Bill,

As always, one chart per customer. And since Herb has mentioned Unify, let me give you my take. (The correct take, I might add!)

Hang On to Dell

Gary, You are one of the main reasons I subscribe to

TheStreet.com

. I follow your columns almost religiously! I'm hoping you can help me analyze Dell (DELL) - Get Report. Since early June, when Dell bottomed around 31 1/2, there seems to be a nice upward trend line that looks unbroken. There does seem to be some strong resistance in the mid-40s. What are your thoughts? Should I sell when this trend line is broken or when it bounces off the mid-40s resistance? -- Stanley Quon

Time for Big Blue

Gary, After the recent selloff in IBM (IBM) - Get Report, is it ready to resume its upward course? I've been trying to decide where support might be: 120? 110? The huge vertical run-up in April almost creates two different IBM charts; in order to estimate support and resistance, should one look at only the past three months? Or the past six months to a year? -- Eric Feuerstein

Eric,

Before I look at the chart, let me address your question on what time frame to look at. The fact is, there is no perfect answer for everyone. Rather, the answer depends on the time frame one is trading in. For example, my time frame is multiday, so I tend to look at daily charts going back no longer than six months. Everything beyond that is usually irrelevant.

However, if your time frame is weeks or months, then it makes perfect sense to look back a year, or maybe more.

That said, let me show you IBM, with my short-term trader hat on.

Davox on the Rebound

Gary, Thoughts on Davox (DAVX) ? After a horrendous year, did this stock begin a serious rebound that can bring it back to its old highs? -- Philip Moos

Amkor Away!

Gary, I bought Amkor Technology (AMKR) - Get Report at 7 1/2 (thanks to the Stock Mart article in

TSC

) and am curious if you can identify what TA says regarding how far this stock can run? I like its business and leadership position in the electronic packaging industry but am not clear on the best way to identify how far a stock can run once it breaks out of a base. -- Jack Radle

Still Fuel in Gemstar's Tank

Gemstar (GMST) had an incredible run in early April (up 100% in eight days) and another nice move in early July. What's your take? Is it running out of gas? -- David McFetridge

The Right Call

Gary, Can you please take a look at Sprint PCS (PCS) ? I am a novice at TA, but the chart had what appeared to be a cup with handle. I suspect the stock would have gone higher if the market had continued upward. -- James Prince

PMRY Has Good Sign

Gary, I hatched on Sept. 13, Virgo extraordinaire, and a chart nut from the first dollar (never understood annual reports, just looked at the pictures). So, my half-priced request is Pomeroy Computer Resource (PMRY) , just broke out of a three-month base, MACD moving average convergence/divergence and OBV on balance volume look good, and market neutral (I'm even getting optimistic -- everybody I know is in the dumps), looks like 20 to me. What do you think? -- Russ Miller

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 held no positions in any securities mentioned in this column, 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 writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at

gbsmith@ibm.net.