The MTG Stalk Sheet
May 9, 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
SQM - Sociedad Quimica y Minera
Industry - Chemical Manufacturing
Side - Long
Shares - 200
Stalking since - May 9
Timeframe - 2 weeks to 2 months
Trigger - 25.50
Target -
Stop - 23.49
Notes -
- SQM has rallied about 50% higher from the breakout pivot in March.
- It's in pullback mode and the volume has really dried up over the past few days which is bullish. So far we see no signs of heavy selling on the correction.
- Strong stocks tend to pull back 10-20% off the highs after making explosive moves. The correction period can last anwhere from three to seven weeks, sometimes more.
- We are looking to buy the first test of the 50-day MA, where we believe the stock will receive instituional support.
- Our buy entry is just above the 50-day MA at 25.50.
- The stop is placed about 7% from our entry.
- Trade expectations - We are looking at a potential long term position entry in SQM at the 50-day MA. We expect a test of the prior highs at the very least over the next few weeks. If the price and volume action holds up well and forms another entry point, we will look to add to our position at a higher price.
BMRN - BioMarin Pharmaceutical
Industry - Biotech
Side - Long
Shares - 225
Stalking since - May 7
Timeframe - 5 - 20 days
Trigger - 38.20
Target - breakout to new highs
Stop - 36.65
Notes -
- BMRN has formed a double bottom pattern (the top chart outlines the pattern, looks like a W). What makes this formation significant is when the second low undercuts
the first low, and quickly reverses. This second low washes out all the remaining weak longs.
- Note the two biggest volume spikes within the pattern. Circled in yellow on the bottom chart is the strong volume reversal bar of 4/17 that undercuts the 3/17 low. The second spike in volume is the gap up above the 50-day MA from strong earnings on 4/30 (circled in purple).
- The official buy point of a double bottom pattern is the mid-point of the formation (37.28). We are getting a second valid entry point (just a touch higher) from the tight range of consolidation below 38 over the past few days.
- The buy entry is over the highs of the tight range.
- We are using a "darvas stop", which is placed a point or two below the entry to guard against a false breakout. We are risking about 1/3 of our max loss, which allows us to re-enter if the breakout fails with little damage done to our capital. A more conservative approach would be to place the stop just beneath the 50-day MA.
- Trade expectations - We are looking for a big volume breakout above 38, followed by a breakout to new highs over the next few weeks.
"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 pullback in a strong uptrend or pullbacks to the 20 & 50-day MA's)
New setups
- SQM - 25.50
- MATK - 34.74
- ABFS - 38.51
- JASO - 22.01
- ESRX - 71.76
-----------------------------------
- BRCM - 27.35
- IMCL - 45.51
- BMRN - pullback to 35.50-36.00 (50-day MA)
- OTEX - 35.50-36.50 pullback to breakout pivot
- STLD - pullback to 34.00 (50-day MA)
- SLB - 100.65 (triggered 5/5)
- CF - 136.01 (triggered 5/5)
- MOS - 125.60 (triggered 5/5)
- TITN - 20.05 (triggered 5/6)
- LNN - pullback to 96-97 (50-day MA) (triggered 5/6)
- GFA - pullback buy zone 42.50-43.50 (triggered 5/7)
Breakout entries (from cup and handles, bull flags, flat bases,and downtrends)
New setups
- CNX - 92.26
- GMCR - 39.15
- TCK - 48.51
- ANR - 60.01
- RS - 63.12
-----------------------------------
- GDI - 49.51
- CE - 46.15
- BMRN - 38.20
- NUAN - 21.58 (earnings coming up)
- FLS - 123.26
- ILMN - 80.06 (triggered 5/5)
- CELG - 65.01 (triggered 5/5)
- EAC - 46.55 (triggered 5/5)
- CRM - 70.10 (triggered 5/6)
- SID - 45.23 or 45.96 (triggered 5/7)
- AKS - 69.76 (false breakout on 5/7)
- WDC - 30.15 (triggered 5/7)
- WLL - 80.51 (false breakout 5/7)
- BKE - 50.65 (triggered 5/8 on failed gap up)
SHORT WATCHLIST AND TRIGGER
PRICES
- TSO - 24.74 (triggered 5/6)
- RJET - 17.17 (triggered 5/6)
- SCHL - 29.87 & 27.84 (29.87 entry triggered 5/5)
- UCBI - 13.65 (triggered 5/5)
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):
ISRG short (40 shares from May 2) -
sold short 289.60, stop 299.30,
target 252.00, unrealized points = + 2.03, unrealized P/L = + $81
UTHR long (100 shares from May 2) -
bought 90.36, stop 87.74,
target 99.50, unrealized points = + 0.41, unrealized P/L = + $40
Closed positions (since last report):
Current equity exposure ($200,000 max. buying power):
Notes:
Market Conditions / Gameplan:
- We are scanning for quality pullback and breakout entries in leading stocks.
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). Keep a watchlist of these symbols up at all times and review the price action every night after the close. This list of leaders is updated every Monday.
Leaders -
AKS
ANR
APA
BUCY
CF
CLF
CLR
CMP
CSX
DVN
EOG
FDG
FSLR
HAL
HP
JRCC
LNN
MOS
MTL
POT
RRC
SID
SQM
STLD
SWN
USO
UNP
X
XEC
Leading/strong stocks at/near the 50-day MA (a key institutional support level) - STLD, PCU, CRZO, ECA, SYT, XTO, MUR, ADM, MON, FCN
Leading/strong stocks breaking the 50-day (last week) - PBT, XTO, OI, SIAL, DE, MDR, CVA, DNR, FXE, AG
Notes on leaders:
Create a watchlist with the leading stocks mentioned above and note any heavy volume selling.
Open Position Detail:
- UTHR - We loosened up our stop (note the change in red above) to avoid a stop run. So far UTHR is holding up rather well and we may look to add to our position on a strong volume move up.
- ISRG - If ISRG breaks yesterday's reversal bar low, we should see a decent selloff. 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.
Copyright © 2002 - 2007 -
Morpheus Trading, LLC
All Rights Reserved