The MTG Stalk Sheet
February 22, 2008

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


CG - Carolina Group

  • Industry - Tobacco
  • Side - Short
  • Shares - 175
  • Stalking since - February 22
  • Timeframe - 5 - 20 days
  • Trigger - 74.49
  • Target - 69.25
  • Stop - 77.01
  • Notes -
      • CG gapped down below the 200-day MA with big volume on 2/11.
      • Has been trading in a tight range at the lows over the past week.
      • We are looking for follow though to the downside, with an entry beneath the lows of the tight intraday range at 74.49. (use a 15-minute chart to see this consolidation)
      • We are looking for a breakdown at the lows so we do not want to see the price action return back above the 75-76 area (we added another another point to that for more wiggle room to come up with a stop of 77.01).
      • Trade expectations - Look for CG to crack the recent lows and undercut the lows of last August around 70.
    "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 - (changes to trigger prices are highlighted in red)

      Pullback entries - (2-5 day pullbacks)

    • PRGO - 35.40 (triggered 2/19)
    • XTO - 55.70 (triggered 2/19)
    • EOG - 99.11 (gapped above trigger 2/19)
    • ELN - 25.62 (triggered 2/19)
    • FMX - 41.16 (gapped above trigger 2/19)

      Breakout entries (trigger over a range of tight action)

    • AG - 65.60 (triggered 2/21) & 67.01
    • CF - 128.51
    • DECK - 125.01 (false triggered 2/21)
    • SOHU - 48.80
      ------------------------------------
    • MEE - 42.60
    • SGR - 62.20 (triggered 2/21)
    • OI - 56.65
    • AKS - 48.88 (triggered 2/19)
    • ISRG - 316.00 (triggered 2/19)
    • MTL - 114.20 (triggered 2/19)
    • DVN - 95.15 (triggered 2/19)
    • CF - 120.16 (gapped above trigger 2/19)
    • HES - 93.61 (triggered 2/19)
    • PBR - 118.75 (triggered 2/19)
    • ANR - 38.51 (triggered 2/20)

      SHORT WATCHLIST AND TRIGGER PRICES

    • TBL - 14.64
    • DBD - 24.34
    • FNM - 28.94 (triggered 2/19)
    • SNDK - 24.97 (triggered 2/20)
    • PCS - 15.30 (triggered 2/20)
    • LEAP - 36.35 (triggered 2/20)

      Note - Be sure to check for earnings dates before entering setups from the self-serve list over the next few weeks.


    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):

        CSX long (200 shares from Feb. 20) -
        bought 50.85, stop 48.89, target new highs, unrealized points = (0.59), unrealized P/L = ($118)

        ADM long (300 shares from Feb. 21) -
        bought 46.08, stop 44.74, target new highs, unrealized points = (0.68), unrealized P/L = ($204)

      Closed positions (since last report):

        (none)

      Current equity exposure ($200,000 max. buying power):

        $23,672


      Notes:

      • ADM long triggered. If the stop in ADM is triggered within the first 5-minutes of trading, we will wait for the first 5-minute bar to form and place our stop 11 cents below the 5-minute low.
      • If CSX is unable to hold up we will trail a tight stop to minimize our loss.
      • Our methodology for trading breakouts is aggressive and detailed below.
        • If a stock fails to hold above the pivot point on the day that it triggers it is called a false breakout. We prefer to exit false breakouts with a small loss and try again the next day.... especially when the volume is light.
        • If the volume is strong and the price action extends 3-5% above the pivot on the day it triggers, then our confidence is high.
        • If a stock starts off strong then fades in the afternoon, but the volume was heavy on the breakout we will often give the setup the benefit of the doubt and try to hold on for one more day. If the price action does not recover on day 2 then we exit the position and limit our losses.
        • We exit the majority of our breakouts well ahead of the stop. The original stop is used when there is a legit breakout that extends for a few days and then pulls back to test the pivot. We often see this test of the pivot dip below our entry by a point or so. We do not want to sell this test because it has already established itself as a legit breakout, so this reaction move is more than likely a shakeout of the weak longs.
        • The point of this system is that we are looking for the breakout that sticks to bring us a strong winner. We do not mind taking a few small losses along the way in searching for that winner. Sometimes we will miss a breakout in doing this, but if the breakout is legit, then we will be able to buy the pullback down the road. Please email us if you have further questions about this system.


      Market Conditions / Gameplan:

      Market continues to be a chopfest. We still have on limited positions and are looking to go both long and short quality setups.


      Market Leaders:

        Monitoring the price action of leading stocks is the best way to gauge the health of the market. This list of leaders is updated every Monday.

          Leaders - ACI, AEM, AUXL, BVN, BMRN, CF, CLF, CNX, DBA, DBC, DVN, EOG, FCL, FSLR, ISRG, MA, MEE, MOS, MTL, OI, PBR, POT, PRGO, RRRC, SID, SLV, SPW, WLT,

          Leaders at/near the 50-day MA (a key institutional support level) - AG, AGU, ATW, FCL, FCX, FSLR, FWLT, HES, ISRG, MICC, NBL, OXY, PCU, RIO, VIP

          Leading stocks breaking the 50-day MA (last week) - none

        Notes on leaders:

      • The number of bullish chart patterns have increased over the past two weeks.

      Open Position Detail:

      • CSX - Closed just beneath breakout pivot. Should hold above 50. No change in stop.
      • ADM - Ugly afternoon selloff that closed at hourly downtrend line. No change in stop.


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      Please check out the MTG Stalk Sheet Subscriber Guide to learn how to get the most from your subscription.

      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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      All Rights Reserved



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