The MTG Stalk Sheet
April 2, 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



RRC - Range Resources

  • Industry - Oil & Gas Operations/ Natural Gas
  • Side - Long
  • Shares - 250
  • Stalking since - April 2
  • Timeframe - 5 - 20 days
  • Trigger - 65.01
  • Target - new highs
  • Stop - 62.94
  • Notes -
      • RRC has been consolidating in a very tight range over the past few weeks at the highs.
      • We see no signs of heavy selling during the consolidation (note the very light volume, well below average).
      • Found support at the 50-day MA on 3/20.
      • RRC is in a strong group (natural gas) with many stocks trading at/near 52-week with tight patterns (DVN, APA, XTO, and EOG are a few).
      • The entry is over the highs of the range.
      • The stop is placed about 2 points beneath our entry. We prefer to set tight stops on breakouts because the action should be strong out of the gate. This is an agressive breakout system designed to hold winning stocks and let profits run, while cutting losses as quickly as possible. The point is to make good money when your right and not loose too much when wrong.
      • Trade expectations - Look for RRC to breakout to new highs over the next dew days on a surge in volume.
    "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)

    • RIG - 138.15
    • CHT - 26.30 (gapped higher and faded)
    • BMRN - 36.11 & 36.65 (triggered 4/1)
    • KSU - 40.31 (triggered 3/31)
    • RYL - 32.61 (triggered 3/31)
    • MTH - 19.55 (triggered 3/31)
    • WMT - 52.80 (triggered 3/31)
    • XEC - 55.05 (gapped above trigger)
    • PNRA - 42.65 (triggered 4/1)
    • KBH - 25.85 (triggered 4/1)
    • CEPH - 64.60 (gapped above trigger)
    • MA - 223.01 (gapped above trigger)

      Breakout entries (typically trigger over a tight trading range)

      New setups

    • EOG - 122.11
    • CRM - 62.05 & 63.60
    • SWN - 34.32
      ---------------------
    • RRC - 65.13
    • LNN - 107.55
    • MON - 117.11
    • DVN - 108.26
    • APA - 122.51
    • ITRI - 95.65
    • FDG - 54.26
    • SCHN - 73.51 (triggered 4/1)
    • ILMN - 75.18 (triggered 3/31)
    • ISRG - 332.11 (triggered 4/1)
    • HP - 47.51 (triggered 4/1)

      SHORT WATCHLIST AND TRIGGER PRICES

    • AMGN - 41.24
    • GAS - 32.70
    • DLX - 19.04 (triggered 3/31)
    • EEFT - 19.11 (triggered 3/31)
    • SLM - 14.63 (triggered 3/31)
    • FFIV - 18.77 (triggered 3/31)
    • RVBD - 15.43 (triggered 3/31)


    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):

        SIAL long (200 shares from March 28) - bought 57.49, stop 58.74, target new highs (will trail stop), unrealized points = + 3.87, unrealized P/L = + $770

        ISRG long (50 shares from Arpil 1) - bought 332.35, stop 326.89, target new highs (will trail stop), unrealized points = + 14.59, unrealized P/L = + $728

        FLR long (100 shares from April 1) - bought 146.55, stop 143.49, target new highs (will trail stop), unrealized points = + 2.23, unrealized P/L = + $221

        BRKR long (350 shares from March 26) - bought 16.04, stop 14.69, target (new highs), unrealized points = + 0.11, unrealized P/L = + $31

      Closed positions (since last report):

        MA long (75 shares from March 26) - bought 230.44, sold 224.92, points = (5.52), net P/L = ($277)

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

        $50,150


      Notes:

      • Per intraday email alert, we re-entered ISRG and added MA and FLR. Though MA started off strong, buying interest faded and it fell apart in the afternoon and triggered our stop. We will continue to monitor for a re-entry.
      • Most of our swing setups on the self-serve watchlist have triggered. There are quite a few strong breakout candidates yet to trigger.


      Market Conditions / Gameplan:

    • The bottoming process is a fact finding mission, where we gather evidence to build our case for the long side. Yesterday's huge gains across the board confirms that an intermediate term bottom has been put in. Tuesday's monster up volume accounted for over 90% of the total volume on the nyse for the third time in three weeks. This is a very bullish sign, as it normally takes just two days of 90% up volume to ignite a significant rally (one more couldn't hurt). We are looking to establish new long positions in stocks breaking out to or pulling back from new highs.


      Market Leaders:

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

          Leaders - AKS ANR APA BRKR CALM CLF CMP CSX DVN EOG FCN FDG FMX HP ILMN KEX LNN MA MT NFLX NUE PRGO RRC SIAL SID STLD WLT WMT XEC XTO

          Leaders at/near the 50-day MA (a key institutional support level) - MON GG SLV

          Leading stocks breaking the 50-day (last week) - WMS WFR


        Notes on leaders:

      • Look out for bull flag setups in natural gas stocks.
      • Home construction stocks are showing relative strength so far this year - RYL, MTH, and KBH.
      • Steel and iron stocks are in great shape at the highs.

      Open Position Detail:

      • SIAL - Strong close. No change in stop.
      • BRKR - Improving action. No change in stop.
      • ISRG - Great breakout with strong price and volume action. No change in stop.
      • FLR - Decent breakout with solid price action and higher volume. No change in stop.


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      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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