The MTG Stalk Sheet
May 12, 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




EXM - Excel Maritime Carriers

  • Industry - Shipping
  • Side - Long
  • Shares - 200
  • Stalking since - May 12
  • Timeframe - 2 - 5 days
  • Trigger - 46.32
  • Target - 55.00
  • Stop - 44.45
  • Notes -
      • EXM rallied on huge volume after breaking a six month downtrend line on 4/16.
      • Pulled back on lighter volume from 4/25 to 5/1.
      • Shipping stocks have been very strong over the past few weeks (GNK, EGLE, DRYS, and TBSI).
      • Our buy entry is just above the highs of last week's tight range.
      • The stop is placed a point and a half below the entry (we either want to be right or right out).
      • Trade expectations - We are looking for a pick up in volume and a close above 47 as confirmation. EXM reports earnings on 5/19, so we are looking for a quick pop and exit into strength.



    POT - Potash

  • Industry - Agricultural Chemicals
  • Side - Long
  • Shares - see notes
  • Stalking since - May 12
  • Timeframe - 5 - 20 days
  • Trigger - see notes
  • Target - new highs
  • Stop - see notes
  • Notes -
      • POT is forming a tight bull flag pattern here after a false breakdown below the 20-day EMA.
      • There are two possible entry points (both could trigger).
        • Breakout entry - buy 75 shares at 201.01 (over the two day high), stop 196.95.
        • Pullback entry - buy 75 shares at 192.50, stop 188.49
      • If the pullback entry triggers first, then we will add 75 shares at the breakout entry for a total of 150 shares. If the breakout entry triggers first, then we will buy 75 shares and cancel the pullback setup.
      • Trade expectations - We are looking for a breakout to new highs over the next week or two.



    SQM - Sociedad Quimica y Minera

  • Industry - Chemical Manufacturing
  • Side - Long
  • Shares - 250
  • 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.
    "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)

    • SQM - 25.50
    • FEED - 19.40
    • GMCR - 38.55
    • ABFS - 38.86
    • ESRX - 71.76
    • GFA - 42.21
    • BIDU - 348.00
    • GOOG - 576.00
    • SPWR - 85.01
    • SOL - pullback to 18.50-19
    • ME - pullback to 30-30.50

      Breakout entries (from cup and handles, bull flags, flat bases,and downtrends)

    • JASO - 27.11
    • CNX - 92.26
    • TCK - 48.51
    • OXY - 88.80
    • POT - 201.01 (pullback entry from 191-192)
    • AGU - 87.51
    • GA - 17.20 (early entry on break of downtrend at 15.90)
    • ILMN - 81.30 (early entry on break of downtrend at 79.11)
    • EXM - 46.32

      SHORT WATCHLIST AND TRIGGER PRICES

    • LFG - 28.65
    • GET - 28.69


    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):

        BMRN long (225 shares from May 9) -
        bought 38.23, stop 36.65, target new highs, unrealized points = + 0.77, unrealized P/L = + $171

        UTHR long (100 shares from May 2) -
        bought 90.36, stop 87.74, target 99.50, unrealized points = + 0.41, unrealized P/L = + $40

        ISRG short (40 shares from May 2) -
        sold short 289.60, stop 299.30, target 252.00, unrealized points = + 0.50, unrealized P/L = + $20

      Closed positions (since last report):

        (none)

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

        $29,326


      Notes:

      • BMRN long triggered.


      Market Conditions / Gameplan:

    • Friday's volume came in lighter, so indices avoided a bearish distribution day. So far the rally appears to be holding up. Leading stocks are acting well, so unless we see another day of heavy selling in the broad market we will continue to establish new long positions. 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) - CMP, STLD, PCU, MDR, SYT, CELG

          Leading/strong stocks breaking the 50-day (last week) - PRGO, ITRI


        Notes on leaders:

      • Create a watchlist with the leading stocks mentioned above and note any heavy volume selling.

      Open Position Detail:

      • UTHR - Undercut the lows of the current pullback, should push higher from here.
      • ISRG - A break of the two day low should trigger a decent selloff. No change in stop.
      • BMRN - Strong breakout on a pick up in volume.


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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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