The literal version, "She is smoking!" (smoking a cigarette, sound like she shouldn't be)
Alternatively, this is another way to say she is extremely attractive. "Hot" might also be used with this, to mean "attractive".
She's really hot!
She's smoking hot! (here "really" and "smoking" modify "hot")
Shortening the second one, "She's smoking." =She's hot/very attractive.
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And your question, "Can it mean she's angry?"
Oddly/interestingly, altho smoke and fumes are so similar, by saying "She's fuming," or "She's fuming hot," you are now saying that she's very angry.