INTERVIEW
"I'm A Technician First"
Gary Kaltbaum
by Jayanthi Gopalakrishnan
Gary Kaltbaum, a well-known technical analyst and host of the nationally
syndicated radio program Investor's Edge, specializes in identifying and
trading growth stocks in the intermediate-term time frame. Kaltbaum is
also an investment advisor with over $125 million under management. Not
only that, he is a Fox News Channel business contributor and has been frequently
quoted in the financial and national media, including the Associated Press
organization, and USA Today, The Wall Street Journal, as
well as other major venues. His upcoming book, How I Trade The Markets,
will be published in the second quarter of 2004.
What does Kaltbaum have to say about the current markets and the
best way to trade and analyze them? To find out, STOCKS & COMMODITIES
Editor Jayanthi Gopalakrishnan spoke with Kaltbaum on Tuesday, November
25, 2003.
The two emotions, fear and greed, are always
going to be there, whether it's 1900, 2000, or 2100.
How did you get started in technical analysis?
Basically, in 1990 or so, a friend of mine showed me the daily graphs
that O'Neil & Co. publishes, and I got hooked.
How do technicians like you survive in a world where technical
analysis doesn't get the respect it deserves?
Frankly, I love it. The more people tell me it doesn't work, the more
I know it does work, and the more people that tell me it's voodoo, God
bless 'em, that's all I can tell you. When everybody tells me it works,
that's when I'll start worrying.
Are there any specific patterns or indicators you look at?
The most important thing I look for is price and volume. I first look
at sectors to determine which ones are the strongest in the market. Next,
I look at what stocks are involved in those sectors. We look for names
that are building bases; we're looking for an area of support and resistance
over a good period of time. Second, we look for the ability of stocks in
that group to break out of those bases on heavy volume.
The more sectors that participate in that breakout, the better you know
the market's going to be, and the more stocks that participate, the better
the market's going to be. We try not to go too far forward, though; I try
not to predict. I'm not one of those technicians who say, "By the
end of the year we'll be at 12,000 on the Dow Jones." The most important
thing is to interpret today, and that's all you need to know today.
Do you mostly look at daily movements and hold your positions
for more than a day?
I am not a daytrader. I would call myself intermediate. If I can buy
a stock today on a breakout and hold it for a year, that means I'm going
to have a huge winner. I try to hold as long as the stock is acting well,
has strong relative strength, is in an uptrend, and has good volume patterns.
In such a situation I try to stay with it as long as possible.
...Continued in the February 2004 issue of Technical Analysis of
STOCKS & COMMODITIES
Excerpted from an article originally published in the February 2004
issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 2004, Technical Analysis, Inc.
Return to February 2004 Contents
