Technical Analysis Published by Raymond James & Associates

Transcription

1 Published by Raymond James & Associates P. Arthur Huprich, CMT, (727) , and The Technical Strategy Team February 8, 2013 Weekly - "Run, Forrest. Run." NASDAQ`s Catching Up Friday Morning 02/08 Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!...from Lewis Carroll s Through the Looking Glass Running in Place With the majority of earnings reports behind us, Wall Street was running fast yesterday as investors and traders turned their focus towards Europe and Congress (impending sequestration). Europe was a big part of yesterday s intraday decline. For technical context on various European bourses, please refer to my report dated 2/7/13 titled, European Market Update. In terms of yesterday s tape, stocks sold off right at the open. Interestingly, a few minutes after European trading closed, the DJIA recorded its intraday low, down 133 points, fractionally under support at This proved to be a very small shake out pattern (a false breakdown) as no other domestic stock market index came close to testing support, no less breaking it. Consequently, the senior index rebounded and by the close was down 42 points. In terms of trend, the D.J. Transportation Average closed at another new high, led mostly by airline stocks. Alternatively, Consumer Staples, historically a low beta haven for dollars, exhibited excellent relative strength. The relative strength trend of the Consumer Staples Select Sector SPDR Fund (XLP/$37.51) recently completed a short-term bottoming pattern. The Value Buyer, as compared to the Trend Follower, should identify fundamentally attractive companies with supporting technical characteristics. For individual ideas, please contact your personal Raymond James Financial Advisor. Interestingly, while both the DJIA and S&P 500 have been running in place over the past several weeks, it only took the DJIA two days to move from the top of its short-term trading range (resistance = 14020) to the lower end of the range (support = to 13852). The trading action exhibited by the S&P 500 is similar - please see chart. Additionally, one benefit of the S&P 500 running in place is that its 50-DMA is playing catch up, making the index a bit less overbought, defined by distance from its 50-DMA. Since Advance - Decline Lines across the board have recorded new highs and near-term support has not been violated, both the shortterm and overall trends of the stock market remain constructive. Finally, if you are in the Mid- Atlantic and Northeast, please be safe with the storm; it s a major reason I went to college in the South and just kept moving further, south that is. *Note, the above commentary appeared in Morning Tack. Thursday Afternoon 02/07 European Market Update While indices around the world are still exhibiting bullish, yet very overbought, chart configurations, as defined by the MSCI World Index, following a move up to, and failure at resistance by the relative strength trend of the MSCI European Index, it looks like the odds favor a deeper pullback amongst European bourses, and it is vital that underlying support hold! Please read domestic and foreign disclosure/risk information beginning on page 11 and Analyst Certification on page 11. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

2 MSCI The World Index 05-Dec-2006 to 07-Feb-2013 (Daily) 5 Year - Daily Last: ,200 1,100 1, Day Moving Average 200 Day Moving Agerage Price(WO-MSX) 500 '07 '08 '09 '10 '11 '12 MSCI Europe vs S&P Feb-2010 to 06-Feb-2013 (Daily) Relative Strength Following a failure at resistance, while the trend is still favorable, it looks like support will be tested, as shown below. Consistent with the above, Chief Economist Dr. Scott Brown recently made the following statement: The crisis has not gone away. It has stabilized somewhat and there is less fear than there was a year ago. However, worries could heat up again relatively soon /10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 MSCI Europe Source: FactSet Prices Consequently, let s dig down one level and look at specific European bourses. Germany - DAX 30 Index: In light of the short-term breakdown and violation of the 50-day moving average (DMA), the importance of holding support in the area between 7459 and 7400 becomes obvious! United Kingdom - FTSE 100 Index: The FTSE 100 has held up extremely well, relative to its peers. However, given its parabolic look, I d rebalance positions and tighten stops. France - CAC 40 Index: In light of a violation of the 50-DMA and an uptrend line (not shown), I would quickly tighten stop loss points. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

3 Spain - IBEX 35 Index: A failed breakout coupled with trend line and moving average (50-day) violations suggest stepping away until we see how support holds up. In the meantime, please tightly manage stock-specific risk! Italy - FTSE MIB Index: If this index holds neckline support and/or the 200-DMA, currently at 16,200 and 15,110 respectively AND turns up, I would feel better about making new commitments. But not until then. Euro - SPDR EURO STOXX 50 ETF (FEZ/comparable to the Dow Jones Industrial Average in the United States): In light of the bearish short-term absolute and relative price action, a violation of support at $34 would imply a deeper correction and a greater emphasis on managing risk. DAX 30 Index (Germany) Germany DAX (TR) 04-Feb-2011 to 06-Feb-2013 (Daily) 2 Year - Daily Last: In light of the short-term breakdown and violation of the 50-day moving average (DMA), the importance of holding support in the area of 7459 to 7400 becomes obvious! A violation of support would suggest raising some cash. 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5, Day Moving Average 200 Day Moving Agerage Price(DAX-XEX) 4,500 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 FTSE 100 Index (UK) FTSE 100 / England 07-Dec-2010 to 06-Feb-2013 (Daily) 26 Month - Daily Last: The FTSE 100 has held up extremely well, relative to its peers. However, given its parabolic look, I d rebalance positions (read: sell at least a partial position) & tighten stops. Rebalancing such positions allows profits, and cash, to accrue in the portfolio; thus giving you ample capital to use when attractive risk to reward opportunities arise on the long side. 6,600 6,400 6,200 6,000 5,800 5,600 5,400 5,200 Initial support exists in the area of 6100, followed by the 50-DMA, currently at ,000 4, Day Moving Average 200 Day Moving Agerage Price(180555) 4,600 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

4 CAC40 Index (France) France CAC Feb-2010 to 06-Feb-2013 (Daily) 3 Year - Daily Last: In light of a violation of the 50-DMA and an up trend line (not shown), I would quickly tighten stop loss points. In terms of deploying new money, I would wait and see how the index handles underlying support, starting in the area between 3600 and 3540 and the 200-DMA, currently at ,400 4,200 4,000 3,800 3,600 3,400 3,200 3,000 2, Day Moving Average 200 Day Moving Agerage Price(PXL-ENX) 2,600 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 IBEX 35 Index (Spain) Spain IBEX Oct-2007 to 06-Feb-2013 (Daily) 5+ Year - Daily Last: A failed breakout coupled with trend line and moving average (50-day) violations suggest stepping away until we see how support holds up. 16,000 In the mean time, please tightly manage stock-specific risk! 14,000 12,000 10,000 8,000 Support can be identified at 7800 followed by the rising 200- DMA, currently between at , Day Moving Average 200 Day Moving Agerage Price(180824) '08 '09 '10 '11 '12 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

5 FTSE MIB Index (Italy) Italy - FTSE MIB 24-Apr-2007 to 06-Feb-2013 (Daily) 5+ Year - Daily Last: If this index holds neckline support and/or the 200-DMA, currently at 16,200 and 15,110 respectively AND turns up, I would feel better about making new commitments. But not until then. Alternatively, a violation of 14,855 would cause me to raise cash, quickly. In the meantime, please raise stop loss points. 45,000 40,000 35,000 30,000 25,000 20,000 15, DMA 200-DMA Price(152165) 10,000 '07 '08 '09 '10 '11 '12 SPDR EURO STOXX 50 ETF (FEZ) Euro - SPDR EURO STOXX 50 ETF In light of the bearish short-term absolute and relative price action, a violation of support at $34 would imply a deeper correction and a greater emphasis on managing risk Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Price 50-DMA 200-Day Moving Average A breakdown by the relative trend is concerning. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Relative Strength to S&P Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Volume International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

6 Thursday Morning 02/07 Innocent Until Proven Guilty: Shaking off news out of Europe yesterday, which sent the DJIA lower by 66 points at the open, stock market indices fought their way back and closed well off their intraday lows. In essence, while small- and mid-cap indices closed at marginal new highs (again), large-cap indices consolidated, forming an inside day. An inside day is when a security trades within the high and low range of the previous day and usually indicative of a pause in trend. In light of the fact that big-cap Advance - Decline Lines (S&P 500, NYSE) recorded new highs yesterday and that near-term support has not been violated, both the short-term and overall price trends of the stock market are viewed constructive on my part innocent until proven guilty. S&P 500 ( ): Near-term support = Near-term resistance = DJIA ( ): Near-term support = Near-term resistance = NASDAQ ( ): Near-term support = Near-term resistance = 3183 Consistent with the observations above, proactive accounts should use a breakout above $58.30 and/or $59.24 to buy Medivation (MDVN/EPS due end of February/favorably rated by a correspondent research source). Please don t anticipate a breakout but follow it, if it occurs and if a breakout occurs, please use a move beneath the most immediate reaction support low, as a stop loss point. MDVN with 50-DMA and 200-DMA. 50-day average volume = 1.08 million shares / beta = 1.10 Medivation Inc. (MDVN) MDVN is a component of the Medical - Biomed/Biotech group and is favorably rated by a correspondent research source MDVN is forming a bullish pattern of accumulation Cup & Handle. Pivot points (technical buy signals) will be registered by a move above $58.30 (an early & aggressive buy point) and above $ Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Price Price - 50-DMA Price DMA Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Relative Strength to S&P 500 A breakout in price (above) should be confirmed by a breakout in relative strength. 13 Please don t anticipate a breakout but follow it, if it occurs. If a breakout occurs, please use a move beneath the most immediate reaction support low, as a stop loss point Ideally, a breakout occurs on above average volume, which in essence, confirms the breakout. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Volume Wednesday Morning 02/06 Here are the newsletter advisory sentiment figures, from Investors Intelligence, and some paraphrased comments: Index and indicator charts remain bullish with the former overextended and the latter readings overbought. The BULLS rose to 54.7% from 54.3%. The latest advance lowered the BEARS to 21.1%. Emphatic bearish comments are getting harder to find. There was also a further expansion for the difference (SPREAD) between the Bulls and Bears to 33.6%. Relative to the numbers above, this writer will add the following: Sentiment levels, which are a secondary indicator due to the difficult nature of their timing, remain a concern price is primary and remains bullish. However, based on the historical chart below, a sell signal for these figures isn t registered until the Bulls are closer to 60% and the Bears closer to 20%. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

7 In my opinion, tweaking your portfolio around the edges, defined by rebalancing over-weighted or extended positions and tightening stop loss points, seems prudent. But please continue to stay in gear with the overall market, which remains up. Chart courtesy of Chartcraft Inc., wholly owned by Stockcube plc, a U.K. company registered in England Relative to the short-term condition of the stock market, over the past three trading sessions the DJIA gained 149 points, lost 129 points and yesterday, gained 99 points. Just as interesting, to me at least, is that while the DJIA closed last night at , six trading days ago, the senior index closed at , in essence, unchanged. While there has not been anything normal about the stock market since the November 2012 lows, normally, when the stock market is in the midst of a well-entrenched trend but then starts to exhibit a lot of day-to-day volatility, with no price change, it increases the odds of an impending trend change. Also, while yesterday s breadth and volume readings were okay, they weren t as strong, as Monday s figures were weak. As a result of these short-term observations and within the context of an overall positive backdrop, short-term oriented accounts should consider the peaks (resistance) and troughs (support) that have been recorded, over the past week or so, as near-term inflection points. S&P 500 ( ): Near-term trough (support) = Near-term peak (resistance) = 1515 DJIA ( ): Near-term trough (support) = Near-term peak (resistance) = NASDAQ ( ): Near-term trough (support) = Near-term peak (resistance) = 3183 Tuesday Morning 02/05 Joe Flacco, Baltimore s new favorite flavor, was lights out Sunday night. - Gary Shelton, Tampa Bay Times columnist Lights Out Not only did Joe Flacco, the Super Bowl winning MVP quarterback of the Baltimore Ravens, play lights out and not only did the lights go out at the Superdome just after the start of the second half Sunday night, but the Bears also turned out the lights yesterday. Similar to the Super Bowl getting delayed as a result of the power outage, on a short-term basis only, upward momentum is slowing as buying pressure is being balanced off by increasing selling pressure. This is evident by the DJIA recording its first triple digit loss for 2013 yesterday, down almost 130 points. 29 of 30 DJIA components closed lower. In addition, all 10 S&P macro sectors closed lower. Technology was the biggest loser, down 1.61%; Telecom Services the smallest loser, down 0.50%. Speaking of such, the relative strength trend of the Telecom Services sector is starting to curl up! This is a good place for value buyers, versus trend followers. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

8 Within the context of a healthy overall uptrend (the short-term trend is stretched above various moving averages) and yet an unfriendly short-term seasonal period (please refer to Technical Perspectives weekly, dated 2/1/13), I ask, Was yesterday s tape action more than profit taking? In looking at the stock market s internals readings from yesterday, NYSE volume contracted yet declining volume equated to 85% of total advancing and declining volume. New 52-week lows on the NYSE contracted and remain fewer than 28, yet the ratio of declining stocks to advancing stocks was over 3.5 to 1. Also, at the close Friday, there were 151 buying climaxes last week, versus 113 the week before, a sign of short-term distribution please refer to the chart. A buying climax occurs when a stock makes a 12-month high, but closes the week with a loss. This is a different type of indicator yet it also shows how buying pressure is being balanced off by increasing selling pressure and why short-term risk should be managed. In summary, one day never creates a trend. Therefore, it s too early to think yesterday was more than profit taking. In order to think something is cracking with the overall uptrend, there would need to be a lengthy pattern of distribution over a period of weeks. A critical guidepost if such selling occurs would be what the internals look like during the first rally try, after such a swing lower, i.e. today. DJIA ( ): Support: ~13860 (steep trend line) followed by (20-DMA) and between and *Note, the above commentary appeared in Morning Tack. Monday Morning 02/04 When Every One Throws in the Towel: We could have a reaction at any time, but the path of least resistance still appears higher is how I answered the question from last Friday, when asked When is the market going to pull back? Case in point: within the context of a firm (bullish) overall trend (please refer to the chart below), while short-term risk exists as stock market indices get stretched above both short-term and long-term moving averages (please refer to the chart below), last Friday s employmentinduced topside surge extended the stock markets string of weekly gains. At the final bell last Friday, for the week, the NASDAQ advanced 0.9%, the S&P 500 added 0.7% and the DJIA gained 0.8%. Consistent with this, the DJIA ( ) is points from its record closing high of recorded in October The DJIA s all-time intraday high developed as a result of a one-day bearish reversal at , on 10/11/07. Let me offer another comment relative to the question above, about when the stock market will pull back. To turn the major trend down, there will need to be a period of consistent distribution. This takes time, which along the way, will exhibit a string of nonconfirmations. In other words, it will take a period of distribution over a period of days and possibly weeks to turn the major trend down. Until that develops, in addition to rebalancing positions and tightening stops, I still think opportunities exist in technically attractive stocks of fundamentally favored companies. Case in point, Outperform-rated Check Point Software Technologies (CHKP). Please refer to page 10 for additional technical details. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

9 DJ Industrial Average (DJII) 5 Year Daily 15,000 14,000 13,000 12,000 11,000 10,000 Price 50 ma 200 ma Investment back drop is being dictated by the mantra Don t Fight the Trend. The record closing high of was recorded in October The DJIA s intraday high developed as a result of a big one-day bearish reversal at , on 10/11/07. '08 '09 '10 '11 '12 9,000 8,000 7,000 6,000 Volume '08 '09 '10 ' DJ Industrial Average 01-Feb-2012 to 04-Feb-2013 (Daily) 1 Year - Daily Last: Within the context of an overall up trend, on a short-term basis, we can see how stretched the DJIA is from its rising 50-DMA and 200-DMA. The previous breakout range, which is now support, is in the area between and ,500 14,000 13, ,000 12,500 A steep trend line offers support at ~ followed by (20-DMA, not shown). 12, Day Moving Average 200 Day Moving Average Price(DJII-USA) 11,500 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

10 Check Point Software Technologies (CHKP/beta = 1.01) A column of X s represents a period of higher prices; a column of O s represents a period of declining prices. Proactive accounts should scale buy this stock now and use $48 and/or $45.50 as a stop loss point. A technical target can be gleaned in the middle to upper $50 s X X O X O X O X X O X-O O-X X O X X O X O X X O X O 2 O X O X O X B X O X O X O X O O C X X O X-O-X---X-----O-X-O-X-O-X-----O O X O X O X O X O X O X O O X O X O X O O X O X O X O X O O X O X 1 X O X O O A O O O O X X X O-7---X---X-O-X-O X O X O X O X O X O X X X X O X O X O X O O X O X O X O X O O X O O X O X O X O X O X O X O X O O O-X O---O-X O O X O X O X O Chart Dorsey Wright & Associates. The opinions offered in this piece should be considered a part of your overall decision-making process. These comments are published individually on a daily basis. This report contains a compilation of several days' worth of comments and is updated weekly. Unless otherwise noted, prices included are as of the previous day's close. For more information about these reports - to discuss how this outlook may affect your personal situation, to learn how this insight may be incorporated into your investment strategy, and/or to receive individual daily reports - please contact your Raymond James financial advisor or use the office locator at to find our offices(s) nearest you today. Company Citations Company Name Ticker Exchange Currency Closing Price RJ Rating RJ Entity Check Point Software Technologies CHKP NASDAQ $ RJ & Associates Medivation, Inc. MDVN NASDAQ $ NC Notes: Prices are as of the most recent close on the indicated exchange and may not be in US$. See Disclosure section for rating definitions. Stocks that do not trade on a U.S. national exchange may not be registered for sale in all U.S. states. NC=not covered. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

11 Important Investor Disclosures Raymond James & Associates (RJA) is a FINRA member firm and is responsible for the preparation and distribution of research created in the United States. Raymond James & Associates is located at The Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg, FL 33716, (727) Non-U.S. affiliates, which are not FINRA member firms, include the following entities which are responsible for the creation and distribution of research in their respective areas; In Canada, Raymond James Ltd. (RJL), Suite 2100, 925 West Georgia Street, Vancouver, BC V6C 3L2, (604) ; In Latin America, Raymond James Latin America (RJLatAm), Ruta 8, km 17, 500, Montevideo, Uruguay, ; In Europe, Raymond James Euro Equities, SAS (RJEE), 40, rue La Boetie, 75008, Paris, France, This document is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The securities discussed in this document may not be eligible for sale in some jurisdictions. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Investors should consider this report as only a single factor in making their investment decision. For clients in the United States: Any foreign securities discussed in this report are generally not eligible for sale in the U.S. unless they are listed on a U.S. exchange. This report is being provided to you for informational purposes only and does not represent a solicitation for the purchase or sale of a security in any state where such a solicitation would be illegal. Investing in securities of issuers organized outside of the U.S., including ADRs, may entail certain risks. The securities of non-u.s. issuers may not be registered with, nor be subject to the reporting requirements of, the U.S. Securities and Exchange Commission. There may be limited information available on such securities. Investors who have received this report may be prohibited in certain states or other jurisdictions from purchasing the securities mentioned in this report. Please ask your Financial Advisor for additional details and to determine if a particular security is eligible for solicitation in your state. The information provided is as of the date above and subject to change, and it should not be deemed a recommendation to buy or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. Persons within the Raymond James family of companies may have information that is not available to the contributors of the information contained in this publication. Raymond James, including affiliates and employees, may execute transactions in the securities listed in this publication that may not be consistent with the ratings appearing in this publication. Additional information is available on request. Analyst Information Registration of Non-U.S. Analysts: The analysts listed on the front of this report who are not employees of Raymond James & Associates, Inc., are not registered/qualified as research analysts under FINRA rules, are not associated persons of Raymond James & Associates, Inc., and are not subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public companies, and trading securities held by a research analyst account. Analyst Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination including quality and performance of research product, the analyst's success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks. The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months. Ratings and Definitions Raymond James & Associates (U.S.) definitions Strong Buy (SB1) Expected to appreciate, produce a total return of at least 15%, and outperform the S&P 500 over the next six to 12 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, a total return of at least 15% is expected to be realized over the next 12 months. Outperform (MO2) Expected to appreciate and outperform the S&P 500 over the next months. For higher yielding and more conservative equities, such as REITs and certain MLPs, an Outperform rating is used for securities where we are comfortable with the relative safety of the dividend and expect a total return modestly exceeding the dividend yield over the next months. Market Perform (MP3) Expected to perform generally in line with the S&P 500 over the next 12 months. Underperform (MU4) Expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. 11 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

12 Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Ltd. (Canada) definitions Strong Buy (SB1) The stock is expected to appreciate and produce a total return of at least 15% and outperform the S&P/TSX Composite Index over the next six months. Outperform (MO2) The stock is expected to appreciate and outperform the S&P/TSX Composite Index over the next twelve months. Market Perform (MP3) The stock is expected to perform generally in line with the S&P/TSX Composite Index over the next twelve months and is potentially a source of funds for more highly rated securities. Underperform (MU4) The stock is expected to underperform the S&P/TSX Composite Index or its sector over the next six to twelve months and should be sold. Raymond James Latin American rating definitions Strong Buy (SB1) Expected to appreciate and produce a total return of at least 25.0% over the next twelve months. Outperform (MO2) Expected to appreciate and produce a total return of between 15.0% and 25.0% over the next twelve months. Market Perform (MP3) Expected to perform in line with the underlying country index. Underperform (MU4) Expected to underperform the underlying country index. Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Euro Equities, SAS rating definitions Strong Buy (1) Expected to appreciate, produce a total return of at least 15%, and outperform the Stoxx 600 over the next 6 to 12 months. Outperform (2) Expected to appreciate and outperform the Stoxx 600 over the next 12 months. Market Perform (3) Expected to perform generally in line with the Stoxx 600 over the next 12 months. Underperform (4) Expected to underperform the Stoxx 600 or its sector over the next 6 to 12 months. Suspended (S) The rating and target price have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and target price are no longer in effect for this security and should not be relied upon. In transacting in any security, investors should be aware that other securities in the Raymond James research coverage universe might carry a higher or lower rating. Investors should feel free to contact their Financial Advisor to discuss the merits of other available investments. Rating Distributions Coverage Universe Rating Distribution Investment Banking Distribution RJA RJL RJ LatAm RJEE RJA RJL RJ LatAm RJEE Strong Buy and Outperform (Buy) 49% 61% 33% 47% 21% 36% 0% 0% Market Perform (Hold) 44% 38% 61% 37% 8% 22% 0% 0% Underperform (Sell) 7% 1% 6% 15% 3% 0% 0% 0% Suitability Categories (SR) For stocks rated by Raymond James & Associates only, the following Suitability Categories provide an assessment of potential risk factors for investors. Suitability ratings are not assigned to stocks rated Underperform (Sell). Projected 12-month price targets are assigned only to stocks rated Strong Buy or Outperform. Total Return (TR) Lower risk equities possessing dividend yields above that of the S&P 500 and greater stability of principal. Growth (G) Low to average risk equities with sound financials, more consistent earnings growth, at least a small dividend, and the potential for long-term price appreciation. Aggressive Growth (AG) Medium or higher risk equities of companies in fast growing and competitive industries, with less predictable earnings and acceptable, but possibly more leveraged balance sheets. High Risk (HR) Companies with less predictable earnings (or losses), rapidly changing market dynamics, financial and competitive issues, higher price volatility (beta), and risk of principal. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

13 Venture Risk (VR) Companies with a short or unprofitable operating history, limited or less predictable revenues, very high risk associated with success, and a substantial risk of principal. Raymond James Relationship Disclosures Raymond James expects to receive or intends to seek compensation for investment banking services from the subject companies in the next three months. Company Name Disclosure Check Point Software Raymond James & Associates makes a market in shares of CHKP. Technologies Risk Factors Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available at rjcapitalmarkets.com/disclosures/index. Copies of research or Raymond James summary policies relating to research analyst independence can be obtained by contacting any Raymond James & Associates or Raymond James Financial Services office (please see raymondjames.com for office locations) or by calling , toll free or sending a written request to the Equity Research Library, Raymond James & Associates, Inc., Tower 3, 6 th Floor, 880 Carillon Parkway, St. Petersburg, FL International securities involve additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Small-cap stocks generally involve greater risks. Dividends are not guaranteed and will fluctuate. Past performance may not be indicative of future results. Investors should consider the investment objectives, risks, and charges and expenses of mutual funds carefully before investing. The prospectus contains this and other information about mutual funds. The prospectus is available from your financial advisor and should be read carefully before investing. For clients in the United Kingdom: For clients of Raymond James & Associates (London Branch) and Raymond James Financial International Limited (RJFI): This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in the FSA rules or persons described in Articles 19(5) (Investment professionals) or 49(2) (High net worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or any other person to whom this promotion may lawfully be directed. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as Retail Clients. For clients of Raymond James Investment Services, Ltd.: This report is for the use of professional investment advisers and managers and is not intended for use by clients. For purposes of the Financial Services Authority requirements, this research report is classified as independent with respect to conflict of interest management. RJA, RJFI, and Raymond James Investment Services, Ltd. are authorised and regulated by the Financial Services Authority in the United Kingdom. For clients in France: This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in Code Monétaire et Financier and Règlement Général de l Autorité des Marchés Financiers. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as Retail Clients. For institutional clients in the European Economic Area (EEA) outside of the United Kingdom: This document (and any attachments or exhibits hereto) is intended only for EEA institutional clients or others to whom it may lawfully be submitted. Raymond James International and Raymond James Euro Equities are authorized by the Autorité de Contrôle Prudentiel in France and regulated by the Autorité de Contrôle Prudentiel and the Autorité des Marchés Financiers. For Canadian clients: International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

14 releasable research is RJA client Raymond James This report is not prepared subject to Canadian disclosure requirements, unless a Canadian analyst has contributed to the content of the report. In the case where there is Canadian analyst contribution, the report meets all applicable IIROC disclosure requirements. Proprietary Rights Notice: By accepting a copy of this report, you acknowledge and agree as follows: This report is provided to clients of Raymond James only for your personal, noncommercial use. Except as expressly authorized by Raymond James, you may not copy, reproduce, transmit, sell, display, distribute, publish, broadcast, circulate, modify, disseminate or commercially exploit the information contained in this report, in printed, electronic or any other form, in any manner, without the prior express written consent of Raymond James. You also agree not to use the information provided in this report for any unlawful purpose. This This report and its contents are the property of Raymond James and are protected by applicable copyright, trade secret or other intellectual property laws (of the United States and other countries). United States law, 17 U.S.C. Sec.501 et seq, provides for civil and criminal penalties for copyright infringement. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida