The MTG Stalk Sheet
August 2, 2007

The MTG Stalk Sheet presents you with the best individual stocks that Morpheus Trading Group is stalking for potential trade entry each day, all in a concise and easy to understand format. Please be sure to read the MTG Stalk Sheet User Guide in order to understand the terminology below and to receive the maximum benefit from your subscription. Enjoy!


"FULL-SERVE" STALK LIST - (Click here to view the "Full-Serve" Stalk List section of the user guide.)



AMLN - Amylin Pharmaceuticals

  • Industry - Biotechnology & Drugs
  • Side - Long
  • Shares - 250
  • Stalking since - August 2
  • Timeframe - 3 to 10 days
  • Trigger - 47.38
  • Target - new highs (will trail stop)
  • Stop - 45.84
  • Notes -
      • AMLN has shown great relative strength versus the broad market over the past month.
      • Rallied over 10% from the 50-day MA in late July.
      • Has pulled back in an orderly fashion, retracing 38% of the last move up.
      • Our entry is over the downtrend line and the high of 8/1.
      • The stop is placed beneath the low of 8/1. However, if the setup triggers on weak price and volume action we will trail a very tight stop.
      • Trade expectations - We are looking for AMLN to breakout to new highs as the market bounces. We have reduced share size due to the weak market conditions. We will look to sell into strength at new highs.
    "SELF-SERVE" STALK LIST - UPDATED EVERY MONDAY (Click here to view the "Self-Serve" Stalk List section of the user guide.)


      LONG WATCHLIST AND TRIGGER PRICES

      Pullback entries - Place stops at least 1.5 ATR's below the entry to allow the proper wiggle room.

      New Setups

    • AMZN - 78.51
    • ILMN - 47.21
    • FSLR - 111.62
    • AMLN - 47.06
    • ISRG - 214.00
      --------------------
    • DNA - 77.51
    • KCI - 62.76 (triggered 7/30)

      Breakout entries - When two trigger prices are listed, the first trigger is an early entry (usually the break of a downtrend line on the hourly chart). We take no more than 1/3 of our total share size at the early entry, and add the remaining 2/3 at the second trigger (the breakout). Place stops 5% below the entry (conservative), or 1 ATR (or less) below the entry (aggressive).

    • ILMN - 48.12
    • FSLR - 113.00 & 120.00 (triggered 7/30)
    • ISRG - 209.00 (triggered 7/30)
    • SIGM - 33.01 (triggered 7/30 with no follow through)
    • VSEA - re-entry over 48.11 (false breakout 7/31 at 48.11)

      SHORT WATCHLIST AND TRIGGER PRICES       - Place stops at least 1.5 ATR's above the entry to allow the proper wiggle room

      These stocks have sold off sharply and need to bounce for a few days before triggering.
    • VMC, LM, CIT, RE, LAZ, NUE, GEF, LEA, VFC, PCAR, BUCY, MGM.

      NOTE: Be sure to check for earnings announcement dates prior to entering any setups that trigger this week.

    Daily Stalk Summary

    Below is an overview of all "full-serve" open positions, as well as a performance report on all "full-serve" positions that were closed only since the previous day's newsletter. Net P/L figures are based on the $100,000 Stalk Sheet model account size. Changes to open positions since the previous report are listed in red text below:
    Open positions (coming into today):
      ILMN long (200 shares from August 1) -
      bought 46.64, stop 44.53, target new highs (will trail stop), unrealized points = + 0.14, unrealized P/L = + $26

    Closed positions (since last report):

      (none)
    Current equity exposure ($200,000 max. buying power):

      flat
    Notes:

    • Per intraday email alert, we bought ILMN over the hourly downtrend line.

    Market Conditions / Gameplan:

      Broad market looks to have put in a short term bottom yesterday. We may enter one or two more long positions for a quick pop over the next few days. We will look to establish a few short positions on the next bounce in the market.

    Market Leaders: Monitoring the price action of leading stocks is the best way to gauge the health of the market. The list is updated every Monday.

      AAPL, RIMM, GRMN, CROX, DECK, SPWR, FSLR, JASO, FWLT, MA, BIDU, AMZN, MA, TNH, CF, POT, DRYS, PCU, RIG, NOV, BTJ, NVDA, VSEA, LRCX, ILMN, ISRG

    Notes on leaders:

    • We saw ugly price action from MA and TNH. AAPL and AMZN reversed nicely off the lows.

    Open Position Detail:

    • ILMN - Great relative strength. No change in stop.



    Edited by Deron Wagner,
    MTG Founder and Head Trader

    DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have a position in the securities discussed in The MTG Stalk Sheet and may profit in the event the shares of the companies discussed in The MTG Stalk Sheet rise or fall in value. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The MTG Stalk Sheet. The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The MTG Stalk Sheet. Past performance never guarantees future results.

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