Can you believe that of the 889 Yahoo! Clubs in the Investment category, the Gary Smith Technical Trading Club is Numero 12? Now I personally have nothing to do with the club -- I'm not the founder, nor even a member -- but I wonder why I'm not No. 1!
Nah, just kidding. The only thing it does point out is that if I were a stock, NOW would be a good time to short me!
Fortunately, I'm not a stock, so you're kind of stuck with me. I know, depressing isn't it. But there's hope: send in a question to
email@example.com. You'll feel better, and shoot, so will I. My old caveat: I'd appreciate your full name. My new caveat: Sheer laziness, er, volume, prevents me from getting to every question. But, I'll do my best.
Mr.Smith, while reading your past columns through the archives, I came upon a book you once recommended called
Trading by the Minute
by Joe Ross. While looking for this book at amazon.com, I found two other series of books,
TNT series of books by Joe Ross & Mark Cherlin. Also
Hit & Run Trading
series of books by Jeff Cooper. As one can never truly trust the reviews found at these bookstores, I was wondering if you may have either read or heard anything about these books. Since I find you to be an honest and intelligent man, and I enjoy your columns and your insights, your opinion would be invaluable. Thank you very much for your time and trouble. Louis Mitrovich
Louis, how could I resist a letter with such glowing praise? Now, regarding the Joe Ross series of books, I did find some helpful concepts in
Trading by the Minute.
Amongst the others, I only read the first two of the TNT series, and found some useful strategies in those also.
I have also read all of Jeff Cooper's books, and he too has some good tips. That said, my ultimate book recommendations are contained in my Dec. 2
column. It's those books I would look at first.
Gary, Your column is so educating. When are you going to go daily? My (trading) day is not complete on your days off. Well, I have the archives. I bought Business Objects at 15 1/16 -- sold at 17.50; bought again at 19 sold at 25 3/8; bought again at 26 7/8 and still holding. Now I am looking at this high level congestion and I am considering a call purchase at the bottom of the channel (about 34-35). Or a standard GBS break-out buy at 43 on good volume. Your comments on the chart, please. Thanks, Max Almand
Max, a daily dose of GBS? Maybe, but I'm probably better in limited quantities. As for bobjy, see the chart below.
Can you take a peek at MWD? It took out its old high recently. Does this mean it could possibly go to 170 or so, considering the 60-65 point prior "congestion" period? Or has its move been too much of a "V" to consider it congestion? Shed some light if you would be so kind. Thanks as always, Bruce Lulla
Gary: You are my favorite
author! Thanks for the insights. With USB, it looks like a descending triangle. If the stock breaks above $35, it looks like it could run to $51. My question: If it doesn't break the trend line, will it simply continue to hang in the $30 to $35 range? I'm long the stock and wonder when one jumps out with this kind of a bearish pattern. Thanks. Paul Anderson Nautica's NavigationGary: Some of the smartest "buys" I make are the ones I never pull the trigger on. I have looked at NAUT before but never bought it, thank goodness. After some consolidation recently, it sharply broke down. And that's after a similar break in December, both on above-average volume. Short term, what would you look for here? Or would you wait for it to break the intermediate trend line that's been dropping since August of last year? With so many stocks up, I thought I'd give you a different kind of chart to look at. Thanks. George Amistead Net BankingGary, I recently began banking on the Internet with a company named Netbank (NTBK). I am thinking about investing in it but wonder if I have already missed the run. Please provide your thoughts on the chart. Thanks. Stuart McGuire Wondering About WinstarI would be very interested to know your views on Winstar. Good sector... good figures... interesting chart gaps in March and back in October. Possible reverse head and shoulders? Regards, Richard Rubin Short Strategy ClarificationDear Gary, I have followed your great column for quite some time now. One question: With regard to the short strategy, I passed up two short picks which looked like classic GBS shorts in El Paso Energy and Fleet Financial Group in the last couple of days. As I remember you writing that you pass if the companies are involved in mergers, as these companies are, I decided to pass. Is this still part of your short strategy? Kind regards, Alex McCabe
Alex, I'm glad you asked, as this gives me a chance to clarify. With longs, I never trade the company being acquired. Usually, the acquisition price is known upfront, and the only trade you have is on betting the deal actually closes. In short, arbitrage.
However, I will trade the acquirer, both on the long and short side. In sum, the acquiree is off limits; the acquirer, always fair game.
Questioning Colt Telecom
Hi Gary, In a recent article, you mentioned that you don't trade stocks that are range bound. However, I have to say that instead of waiting patiently for breakouts, I like to trade stocks that are stuck in some kind of range. It certain has proven to be quite profitable. I find these stocks through TC2000 under the "congestion" area. Anyhow, kudos for the great articles you have written. Some of them have greatly sharpened my skills. Additionally, I would like to know what you think of COLTY. Its been a great momentum stock that seems to be in a pretty risk-free situation as a long. (It's smacking a double bottom.) I would like your opinion. Thanks in advance Nusair Bawla
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. This column, Technician's Take, appears every Monday. Smith also writes Charted Territory, which appears every Wednesday, and TSC Technical Forum, which runs Saturdays and Sundays.