Technical Review of Stocks

Transcription

1 Update 28 August 2017 CIO Wealth Management Research Peter Lee, Chief Technical Analyst, , ext.01 This report provides technical analysis on stocks that, we believe, are of a wide interest. This list is not a template for the construction of your personal portfolio. You should discuss investment decisions with your Financial Advisor. For more information about this report, see Description and Methodology in the Appendix. We would like to thank Praveen Dodda, an employee of Cognizant Group, for his assistance in preparing this research report. Cognizant staff provides research support services to UBS. ab This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 32. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2 Table of Contents Ticker Name Page Ticker Name Page AAPL APPLE 4 KO COCA-COLA CO 16 ABBV ABBVIE INC 4 MCD MCDONALD'S CORP 17 ABT ABBOTT LABORATORIES 5 MDLZ MONDELEZ INTERNATIONAL INC 17 ACN ACCENTURE 5 MDT MEDTRONIC INC 18 AMGN AMGEN INC 6 MMM 3M CO 18 AMZN AMAZON.COM INC 6 MO ALTRIA GROUP INC 19 BA BOEING 7 MRK MERCK & CO 19 BAC BANK OF AMERICA 7 MSFT MICROSOFT INC 20 BMY BRISTOL-MYERS SQUIBB CO 8 NKE NIKE INC 20 BRK.B BERKSHIRE HATHAWAY - CLASS B 8 OXY OCCIDENTAL PETROLEUM CORP 21 CELG CELGENE CORP 9 PEP PEPSICO INC 21 CPB CAMPBELL SOUP CO 9 PFE PFIZER INC 22 CSCO CISCO SYSTEMS INC 10 PG PROCTER & GAMBLE CO 22 CVS CVS CAREMARK CORP 10 PM PHILIP MORRIS INTERNATIONAL 23 CVX CHEVRON CORP 11 SBUX STARBUCKS 23 DIS THE WALT DISNEY COMPANY 11 SLB SCHLUMBERGER LTD 24 FB FACEBOOK INC 12 T AT&T INC 24 GE GENERAL ELECTRIC CO 12 TXN TEXAS INSTRUMENTS INC 25 GOOGL ALPHABET INC 13 UPS UNITED PARCEL SERVICE 25 HD HOME DEPOT INC 13 UTX UNITED TECHNOLOGIES CORP 26 HON HONEYWELL INTERNATIONAL INC 14 V VISA INC-CLASS A 26 IBM INTL BUSINESS MACHINES CORP 14 VZ VERIZON COMMUNICATIONS INC 27 INTC INTEL CORP 15 WFC WELLS FARGO AND CO 27 JNJ JOHNSON & JOHNSON 15 XOM EXXON MOBIL CORP 28 JPM JPMORGAN CHASE & CO 16 The last update on these stocks was published on 31 July Going forward, our previously published rating for these stocks should not be relied upon. UBS Chief Investment Office Americas, Wealth Management 28 August

3 Changes since last report Additions Ticker Deletions Ticker Name Name Technical Rating Changes Name Ticker Old New CISCO SYSTEMS INC CSCO Bullish Neutral MERCK & CO MRK Bullish Neutral STARBUCKS CORP SBUX Bullish Neutral UBS Chief Investment Office Americas, Wealth Management 28 August

4 Apple Inc (AAPL) / / / Sector Technology Last Sale Price $ Rationale: The Feb '17 breakout above still renders technical targets to (achieved), (achieved), (medium-term), and then (intermediate-term). Although longer-term targets to as high as are possible, over time a high level consolidation will likely develop into this recent sharp rally, prompting a trading range between and before the resumption of primary uptrend. Key supports: (top 8/2/17 gap up), (10-wk ma), (Jun/Jul '17 lows/30-wk ma) and then (Feb '17 breakout). AbbVie Inc (ABBV) Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Jul '15 Jan '16 Jul '16 Jan '17 Jul ' / / / / / Sector Healthcare Last Sale Price $72.11 Rationale: After declining 36.52% from Jul '15-Oct '15, a 2-year basing pattern (triangle pattern) between -61 and has set the stage for a recent triangle breakout. This breakout has triggered a rally to just above its Jul '15 highs (71.) and is now challenging major resistance along the mid-to-high 70s coinciding with the extension of the bottom of its 2013 uptrend channel and the 2015/2016 uptrend channels. A breakout here extends the rally to 79-81/87-88 (intermediate-term) and then low-to-high 90s (longer-term). Key supports: 67-69/63-65 (30-wk ma/triangle breakout). 30 UBS Chief Investment Office Americas, Wealth Management 28 August

5 Abbott Laboratories (ABT) / /36 38/ / Sector Healthcare Last Sale Price $49.38 Rationale: After declining 30.42% from , a 2-year technical base (triangle) has developed between and An early Jun '17 breakout above 46, the closing of a large Aug '15 gap (47.13), and the surpassing of the Nov/Dec '15 reaction highs suggest 10 points or a target closer to the Jul '15 all-time high (51.74). Although ABT could trend higher to and above this to 58- (top of its 2010/2013 uptrend channel), a near-term consolidation is also possible between key support at 46 +/- 1 (30-wk ma/jun '17 breakout) and 51 +/- 1 (2015/2017 all-time highs). Accenture PLC (ACN) / / / / / Sector Technology Last Sale Price $ Rationale: ACN remains in a well-defined uptrend channel dating back to 2008/2009 timeframe and hence our Bullish technical outlook. Although there were three negative outside weeks (6/24/16, 3/24/17, and 6/23/17) in the past year, the ability to maintain above key support near has set the stage for the next sustainable rally. A convincing surge above extends the rally toward and above this to / , intermediate-term. Key initial support moves up to (10-wk ma/recent breakout) and below this to (30-wk ma). UBS Chief Investment Office Americas, Wealth Management 28 August

6 Amgen Inc. (AMGN) /158 1/ / / / Sector Healthcare Last Sale Price $ Rationale: The 281.5% rally from has led to an overbought condition, prompting a 2-plus-year consolidation between (key support) and (key resistance). Since the technical base is -50 points, a convincing move above would confirm a major technical breakout and render targets to (near-term), (medium-term), (intermediate-term), and then (longer-term). Key supports: (10-wk/30- wk ma) and below this (Nov '16 uptrend) and then (May '17 lows and Jan '17 technical breakout). Amazon.com Inc. (AMZN) 1, 1, , 1, / / /710 1,017/1,083 1,150-1,1 1,269 Sector Cons. Disc. Last Sale Price $ Rationale: The 2-year uptrend channel between 742 and 1,017 bodes well for higher prices, over time. In fact, the breakout earlier in the year (late-feb '17) still suggests technical targets to 1,017/1,0 (near-term), 1,150-1,1 (medium-term), and then to 1,269 (longer-term). An overbought condition has developed into a recent rally as evidenced by a negative outside week on 7/28/17 and 3-mo head/shoulders top. This warns of near-term consolidation. Above 1,017/1,084 negates top. Trading below warns of a correction to and below this to UBS Chief Investment Office Americas, Wealth Management 28 August

7 Boeing (BA) / / / Sector Industrials Last Sale Price $ Rationale: The technical breakouts above (Feb '15 highs) and recent moves above (top of its 2013 channel) and above 210 (trend line from early 1990s) have achieved many of our technical targets. Although a flag pattern bodes well for higher prices to and possibly to 2-282, over time, an overbought condition warns of a near-term consolidation. Key initial supports move to (gap up on 7/27/17/Aug '17 lows), (10-wk ma, top of 7/26/17 gap up), and below this to (bottom of Jul '17 gap up and 2010 internal channel). Bank of America Corp (BAC) / / / / /41-43 Sector Financials Last Sale Price $23.84 Rationale: After sustaining its Jul '15-Feb '16 setback (-.5%), this financial name has surged above its 2015 highs (18.48) reinforcing a higher-high pattern above its Apr '10 reaction high of This still suggests technical targets to (near-term, achieved), (medium-term), 33-35/ (intermediate-term), and then to (longterm). However, the 135% rally from its 2016 low (10.99) has created an overbought condition, and a negative outside month (Mar '17) and an 8-mo head and shoulders warn of a consolidation. Key neckline support is UBS Chief Investment Office Americas, Wealth Management 28 August

8 Bristol-Myers Squibb Co (BMY) / / / / /75-77 Sector Healthcare Last Sale Price $58.17 Rationale: A negative outside week (7/29/16) followed by a large gap down (8/5/16) has led to the.34% decline as major supports were broken including the 10/30-week/month ma and pivotal trends (2012/2013 uptrends). A bearish negative outside year (2016) coupled with a negative outside month (Jan '17) and another negative outside week (1/31/17) warn of further volatility. Nonetheless, the ability to find support along the mid-s has led to a potential technical base (triangle). A breakout above key resistance at 58.5 confirms a recovery to the low-to-mid s. Berkshire Hathaway Inc. Class B stock (BRK.B) / / / Sector Financials Last Sale Price $ Rationale: The Dec '16 channel breakout above bodes well for the start of the next major rally. However, an overbought condition developed near its prior all-time high of (Mar '17) prompting a 5-month consolidation back to key support along the low-to-mid 1s. The ability to find support here has re-asserted the primary uptrend. Trading above all-time highs (1.61) hints of upside to (medium-term) and then to (longer-term). UBS Chief Investment Office Americas, Wealth Management 28 August

9 Celgene Corp. (CELG) /115 / / / / / Sector Healthcare Last Sale Price $ Rationale: The Biotechnology index (BTK) as well as CELG have been confined to a wide trading range over the past two years, between the lower end of its range 2,575.58/93-94 and the upper end at 4,315-4,456/ A recent breakout above during Jun '17 still suggests a retest of its Jul '15 all-time high (1.72). Above this can extend the rally to the low-150s and then to the low-to-mid 1s. Key supports: (prior Jun '17 breakout and the 30-wk ma), -125 (Oct '16 uptrend and Dec '16 uptrend), and then (Dec '16 and 2017 lows). Campbell Soup Co. (CPB) / / /61/ Sector Cons. Staples Last Sale Price $52.48 Rationale: The 22.51% decline from Jul '16 high (67.89) to Nov '16 low (52.59) may be similar to the 21.19% decline from Feb '17 high (64.23) to Jul '17 low (50.62). The ability to maintain the low-50s is the key to an oversold rally to initial resistance at (Feb '17 downtrend, 38.2% retracement from the Feb-Jul '17 decline and 30-wk ma). A breakout extends the recovery to ( % retracement and May '17 highs) and then 61 (Jul '16 downtrend and 76.4% retracement). On the other hand, a violation of low-50s warns of a deeper correction to mid-to-high s. UBS Chief Investment Office Americas, Wealth Management 28 August

10 Cisco Systems Inc (CSCO) / / /50 15 Sector Technology Last Sale Price $31.24 Rationale: Jul '16 breakout above still renders targets to the mid-30s (medium-term) and mid-to-high s (longterm). However, failure to surpass the mid-30s (Nov '07/May '17 highs, extension of the top of its 2011/2012 uptrend channel and the 38.2% retracement from decline) coupled with a gap down (5/18/17), negative outside months (May '17 and Aug '17), weekly negative outside weeks (5/12/17, 6/30/17, 8/11/17, 8/18/17) led to breach neckline support at This action confirms an intermediate-term top and forces a downgrade to a Neutral outlook. CVS Caremark Corp. (CVS) / / / Sector Cons. Staples Last Sale Price $75.39 Rationale: This retail healthcare name suffered technical damages during its 39% decline from May to Nov '16 ( to 69.3). Based on an oversold condition and the ability to maintain above its 50% retracement from its 2008 to 2015 rally (68.42), a triangle pattern has developed. The top of its triangle at is key resistance and the bottom of its triangle at is key support. Since the base is around points, this would suggest a breakout above suggests upside to the low-to-mid 90s. Below warns of downside risks to and low-to-mid s. UBS Chief Investment Office Americas, Wealth Management 28 August

11 Chevron Corp (CVX) Sector Energy / / / Last Sale Price $ Rationale: After declining 48.5% from , this energy name may have found key support at (Aug '15), prompting a sharp rally of 71% during However, the rally was too extreme and a negative outside month on Jan '17 and Mar '17 warn of a consolidation. In addition, a recent 2015 rising wedge breakdown below 109 and a weekly death cross sell signal as well as a 1-plus-year head/shoulders top warn of technical weakness. Violation of (38.2% retracement from its rally/apr '16 breakout) warns of downside risks to 98-/94-95/88.5. The Walt Disney Co (DIS) / / / / /-122 Sector Cons. Disc. Last Sale Price $ Rationale: A negative outside month (Aug '15) and the violation of the bottom of its 2011/2012 uptrend channel (below 98) led to a sharp decline toward 86.25, resulting in a key test of support coinciding with the 38.2% retracement (86.21) from its rally. For the past 2-plus years, a large symmetrical triangle has developed between and and hence our Neutral technical outlook. There is key initial support at Violation of support, coupled with a negative outside month (Aug '17) and a death cross sell, renders a retest of key support (mid-90s). UBS Chief Investment Office Americas, Wealth Management 28 August

12 Facebook Inc. (FB) Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Jul '15 Jan '16 Jul '16 Jan '17 Jul '17 166/ / / / / / Sector Technology Last Sale Price $ Rationale: A triangle breakout during Jul '13 above the low-to-mid-30s led to a steeper uptrend channel as defined by and The late Apr '17 breakout above the top of its 3-plus-year uptrend channel above 146 confirms an accelerated channel breakout. This technical breakout still renders targets to the low-to-mid-170s (near-term), (medium) and then to (intermediate-term). Key initial supports move up to (10-wk ma/aug '17 lows), (extension of mid-jul '17 channel breakout), and (top of 3-year channel and 30-wk ma). General Electric Co (GE) / /16/ / / /33.5 Sector Industrials Last Sale Price $24.30 Rationale: A major trend reversal has developed as evidenced by the violations of its pivotal 7-plus-year uptrend channel and a 2-plus-year triangle pattern below These breakdowns warn of downside risks to Under extreme selling the Aug '15 reaction low (19.37) as well as the 50% retracement from its rally (19.36) provides major support. On a near-term basis, the ability to find support near the mid-20s may trigger a technical oversold rally to (10-wk ma and Aug '17 highs) and above this to (extension of its breakdown and 30-wk ma). 18 UBS Chief Investment Office Americas, Wealth Management 28 August

13 Alphabet Inc (GOOGL) 1, , / / / / /11 Sector Technology Last Sale Price $ Rationale: The 4-plus-year uptrend channel breakout above the top of its channel (now at 930/965) still renders upside targets to 1,006-1,009 (near-term, achieved), 1,0-1,050/1,085-1,103 (medium), and then 1,1-1,150 (intermediate). Nonetheless, on a near-term basis, an overbought condition coupled, with three negative outside weeks (6/9/17, 6/30/17 and 7/28/17), warns of a near-term consolidation between (Jul/Aug '17 lows and 10-wk ma) and 1,006-1,009 (Jun/Jul '17 highs). A breakout above 1,009 signals next major rally. Below 913 suggests next decline. Home Depot (HD) / / / / / /176 Sector Cons. Disc. Last Sale Price $ Rationale: The 1-plus-year ascending triangle breakout in Feb '17 above still renders technical targets to (initial), (medium-term), (intermediate), and then to 200 (longer-term). However, an overbought condition, coupled with a daily island reversal pattern on 5/16/17 ( ), negative outside weeks (5/19/17, 6/23/17, 7/21/17 and 8/18/17), and a violation of its pivotal Nov '16 uptrend ( ) warns of a correction to key medium-term support at (38.2% retracement from its Nov '16-May '17 rally and 2015 channel breakout). UBS Chief Investment Office Americas, Wealth Management 28 August

14 Honeywell International Inc. (HON) / / / Sector Industrials Last Sale Price $ Rationale: The technical breakouts on Feb '16 (above ), Feb '17 (above 119-), and Apr '17 ( ) render upside targets to (top of its 2009 uptrend channel-achieved), (top of 2015/2016 channel), (2009 uptrend channel breakout target), and (2015 channel breakout target). Failure to clear convincingly above may trigger a near-term consolidation to key initial supports: (Jul '17 breakout and 10-wk ma), (30-wk ma/4/21/17 gap up), and (Feb '17 breakout, Apr '16 lows, and Aug '15 uptrend). International Business Machines Corp (IBM) / / / / / /183 Sector Technology Last Sale Price $ Rationale: A 3-plus-year downtrend channel breakout above (Dec '16) has led to a rally of 56.12%, which achieved our key intermediate-term targets of (61.8% retracement from its decline, Oct '14 gap down and the May '15 high). A large gap down (4/19/17), rising wedge breakdown ( ), weekly death cross sell signal, and a head/shoulders top warn of a deep correction. The 24% correction over the past 6 mo is now testing key support at (61.8% retracement and Apr/Jul '16 lows) and below this to (76.4% retracement). UBS Chief Investment Office Americas, Wealth Management 28 August

15 Intel Corp (INTC) 33-34/ /27 28/ / / / Sector Technology Last Sale Price $34.71 Rationale: A 12-year head-and-shoulders bottom breakout (29.5, Jun '14) still suggests the potential for higher prices to the mid-to-high s, over time. However, the rally from 2015 low (24.87) has stalled near , coinciding with the Oct '16/Jan '17 highs. A negative outside week (10/14/16), a negative outside month (Oct '16), and a 2-year rising wedge breakdown and the rolling of 10-wk/30-wk ma warn of a consolidation to key initial support at (38.2% retracement from rally and Nov/Dec '16/Jun/Jul '17 lows) and below this to (trend lines). Johnson and Johnson (JNJ) / / / / / Sector Healthcare Last Sale Price $ Rationale: This leadership healthcare name continues to record new all-time highs. However, the relative strength (vs SPX) and the price momentum (MACD) have begun to diverge from its price trend. This warns of a near-term consolidation between (Jun '16 breakout/jan '17 uptrend) and (Jun/Jul '17 highs). A move above confirms a breakout and the resumption of the primary uptrend with next technical targets to and then to Violation of suggests risks to (30-wk ma) and below this to -122 (2015 uptrend). UBS Chief Investment Office Americas, Wealth Management 28 August

16 JPMorgan Chase & Co (JPM) 88.65/ / /94 97/ Sector Financials Last Sale Price $91.52 Rationale: This leading financials name has broken out above the top of its 2012/2013 uptrend channel in the low s. This technical action has strengthened the intermediate-to-longer-term trend outlook. However, a moderately overbought condition in the low 90s and a small head/shoulders top triggered a pullback to The ability to maintain its neckline support (low-s) has triggered a rally to retest its Mar '17 high. A negative outside week (8/11/2017) led to a key break of its initial support at 90.6 (10-wk ma) and warns of a decline to 88.7 (30-wk ma) and then Coca Cola Co (KO) 45.3/ / Sector Cons. Staples Last Sale Price $45.41 Rationale: The rally from the low-s managed to surpass initial resistance at 44.4 (61.82% retracement from its Apr- Dec '16 decline) but failed to surge above its formidable supply at (Apr '16/Jul '16 highs). A moderately overbought condition in the mid-s led to a pullback to support at 44.15, corresponding to its Feb '16 highs. The ability to find support here has triggered the recent rally to the Jul '16 highs. Breakout above confirms the next rally to 49/ (top of its uptrend channel). Violation of support at 45.3 (10-wk ma) warns of a decline to UBS Chief Investment Office Americas, Wealth Management 28 August

17 McDonald s Corp (MCD) 155/ / Sector Cons. Disc. Last Sale Price $ Rationale: The recent surge above May '16 high at signals the resumption of its primary uptrend and renders technical targets to (short-term, achieved), (medium-term, achieved) and then (long-term). The primary uptrend can go on as long as the stock remains above its key initial supports at 148 (Jun '17 low) and then , corresponding to its 4/25/17 large gap up, prior Apr '17 breakout. An overbought condition, coupled with failure to clear above the top of its uptrend channel, suggests a decline to 155 (10-wk ma) and below this to 148 (Jun '17 low). Mondelez International Inc (MDLZ) / / Sector Cons. Staples Last Sale Price $41.88 Rationale: A steady uptrend led to new all-time highs in Jul '14 (39.54) and again in Aug '15 (48.58). However, since then, an ascending triangle has developed between the high 30s to low-s and the high s. The recent rally from the mid-30s (Feb '16 lows) has created a moderately overbought condition along the high s or just under the Oct '15 high (47.42), prompting a pullback to key support at (Apr/May '17 lows). Violation of the uptrend extension (43) would confirm a near-term top and renders downside risks to 39- (Apr/Dec'16 lows) and then UBS Chief Investment Office Americas, Wealth Management 28 August

18 Medtronic Inc. (MDT) / Sector Healthcare Last Sale Price $79.24 Rationale: The rally from the Jan '17 lows has stalled near 89.72, coinciding with Jul '16 highs. A weakening relative strength (vs SPX) and weak price momentum (MACD) led to the breach of its key support along the extension of Dec '16 uptrend and 10-wk ma (86.70). This technical action has weakened the intermediate trend. Violation of key support at (Mar '15 high, Apr '17 low) warns of downside risks to the low-to-mid-70s. A moderately oversold condition may lead to a technical bounce to (10-wk ma). Above signals the resumption of the uptrend. 3M Co (MMM) / / / Sector Industrials Last Sale Price $ Rationale: The longer-term structural uptrend remains intact; however, the intermediate-term trend for this industrials name has weakened after a gap down on 7/25/17. After achieving its near-to-medium-term ( ) targets in Jun '17, an overbought condition led to breach initial support of (10-wk ma). A flat relative strength (vs SPX) and negative outside week (8/18/2017) suggest consolidation back to initial support at 197 (30-wk ma) and below this to next support at (Nov '16 uptrend). Key resistance is at (10-wk ma) and above this to the Jun '17 record highs (214.6). UBS Chief Investment Office Americas, Wealth Management 28 August

19 Altria Group Inc. (MO) / /82 Sector Cons. Staples Last Sale Price $63. Rationale: The rally from Oct '16 lows has stalled near (top of its 2-plus-year uptrend channel) and the recent breakdown below key initial support along the mid-to-high s (prior breakouts and uptrends) confirm an intermediate top. An oversold condition and the ability to find support at -62 (Apr/Oct/Nov '16 lows and 23.6% retracement from rally) may trigger a rally back to (May '17 lows and 10-wk ma). However, violation of -62 suggests the start of a deeper correction to (38.2% retracement) and below this to (50% retracement). Merck & Co (MRK) / / Sector Healthcare Last Sale Price $62.71 Rationale: Key resistance resides near the mid-s (Feb '17 highs) as failure to follow through with Feb '17 breakout led to a consolidation back to (10-wk ma/30-wk ma). The recent breakdown below key supports at (2016 uptrend extension and uptrend channel) coupled with a weekly death cross sell signal warns of a correction to (Oct '16, Jan '17 lows and 50% retracement from the rally). This action confirms an intermediateterm top and forces a downgrade to Neutral technical outlook. Trading above confirms a rally to 75-77/ UBS Chief Investment Office Americas, Wealth Management 28 August

20 Microsoft Inc. (MSFT) 71-72/ / / Sector Technology Last Sale Price $72.69 Rationale: This leading technology name continues to trend higher on the back of strong relative strength (vs SPX) and favorable price momentum. The recent technical breakout above its Jan/Aug '16 highs at renders upside targets to (near-term) and (medium-term). The uptrend can continue as long as the stock remains above its key support at However, a moderately overbought condition, coupled with violation of initial support at 10-wk ma (72), may trigger a pullback to key support in the high s (30-wk ma) and below this to mid-s (Apr'17 lows). Nike Inc. Cl B (NKE) / / Sector Cons. Disc. Last Sale Price $53.84 Rationale: The Sep-Oct '16 correction led to a violation of the bottom of its 2012 uptrend channel. The ability to find support at (Jun '17 low) and a positive outside month (Jun '17) have triggered a recent rally back to, corresponding to Aug '16 highs. The recent rally s failure to surge above key resistance at 62-63, coupled with a large gap down on 8/18/2017, led to breach support at (10-wk /30-wk ma). However, a higher-low pattern (Nov '16 at and Jun '17 at 50.79) offers key support. Violation here warns of a deep correction to the mid-s. UBS Chief Investment Office Americas, Wealth Management 28 August

21 Occidental Petroleum Corp. (OXY) / / /75.6 Sector Energy Last Sale Price $59.13 Rationale: This energy name has struggled to clear above its 50% retracement (79.78) from its decline. The recent 27% correction from (Sep '16 high) is attempting to find support near the high 50s or near its 76.4% retracement (57.20) from its rally and 2016/2017 lows. Violation of support here is negative as this extends the decline to / The ability to find support in the high 50s, coupled with a breakout above (Jul '17 high/30-wk ma), signals a rally to the mid-s/high-s ( % retracement from its decline). Pepsico Inc. (PEP) / Sector Cons. Staples Last Sale Price $ Rationale: The long-term primary trend from Jan '09 lows remains intact. Breakout above the downward-sloping trend line ( ), coupled with a weekly golden cross buy signal, ignited the recent technical rally. A convincing breakout above resistance at (extension of its 2016/2017 uptrend) reasserts the primary uptrend, rendering next targets to (medium-term) and then (intermediate-term). However, failing to sustain a move above the extension of uptrend, coupled with a breakdown below (10-wk ma), hints of a pullback. UBS Chief Investment Office Americas, Wealth Management 28 August

22 Pfizer Inc. (PFE) 32.8/ / / Sector Healthcare Last Sale Price $33.23 Rationale: A negative outside week (8/5/16), coupled with a weekly death crossover (10/14/2016), led to a 4-month 20% correction to (11/04/16). The subsequent rally suddenly stalled near 35 (Feb '15/May '15 highs), prompting a pullback to low 30s. However, the Mar-Jun '17 correction (-8.8%) led to a moderately oversold condition, prompting a rally back to mid-30s. A breakout here and specifically above its Aug '16 highs (37.39) signals the next technical rally toward or the extension of the uptrend. Violation of the low 30s warns of downside to the high 20s. Procter & Gamble Co (PG) /85 86/ / Sector Cons. Staples Last Sale Price $92.27 Rationale: This leading consumer staples name has been confined to a trading range between the low-to-mid-s and the mid-90s over the past few years. The ability to maintain support in the mid-s coupled with a positive outside month (Jul '17) has triggered a technical rally back to its key resistance at (Dec '14 highs). A breakout here signals the resumption of its uptrend and renders upside targets to 101 and then 105. Failure to clear this resistance hints of a nearterm pullback to key support at (10-wk/30-wk ma) and below this to (May '17 low and 2016 uptrend). UBS Chief Investment Office Americas, Wealth Management 28 August

23 Philip Morris International (PM) / Sector Cons. Staples Last Sale Price $ Rationale: The Feb '17 breakout (104.2) has achieved its near-term ( ) as well as medium-term ( ) target. Although higher prices ( ) are possible overtime, the 42.4% rally from its Dec '16 lows has created a moderately overbought condition, prompting a pullback to key initial support at 109 (Apr '17 lows). Failure to find support at (Apr '17, May '17 lows) can extend the correction to key intermediate-term supports at (Jul/Sep '16 highs). Breakout above key resistance at reinforces the uptrend, rendering next upside targets to Starbucks Corp. (SBUX) 52.6/ / /74-75 Sector Cons. Disc. Last Sale Price $53.94 Rationale: The recent rally from the low 50s has stalled near 64.87, coinciding with Oct '15 highs (64) and the top of its uptrend channel (65), and a negative outside month (Jun '17) led to a sharp 18.9% correction from its Jun '17 high (64.87) to its Aug '17 low (52.6). A weekly death cross sell signal (8/11/17), coupled with a negative outside week (7/28/17), led to break of key support at (primary uptrend channel from its lows). This breakdown now forces a technical downgrade to a Neutral outlook and renders next downside risks to mid-to-high s. UBS Chief Investment Office Americas, Wealth Management 28 August

24 Schlumberger Ltd (SLB) / / /.79 Technical rating Bearish Sector Energy Last Sale Price $62.88 Rationale: This energy name has struggled to clear formidable supply at (Jul '15 high) or extension of its uptrend channel. An island reversal (4/17/17), weekly death cross sell (Mar '17), led to its violation of key neckline support (mid-70s), confirming a head/shoulders top pattern. A breakdown here warns of downside risks to the mid-s (achieved) and the low-s (near-term), placing this energy stock at deeply oversold levels. The ability to find support at (Jan '16 lows) may trigger a technical oversold rally to 66 (10-wk ma) and above this 73 (30-wk ma)/ AT&T Inc. (T) Support Levels / / Sector Comm.Services Last Sale Price $37.68 Rationale: Negative outside weeks (1/6/17, 3/24/17 and 4/28/17), coupled with an island reversal (6/16/17), led to a 16.8% correction from Jan '17 high (43.03) to its Jul '17 low (35.81). A positive outside month (Jul '17) and a positive outside week (7/28/17) have triggered a rally to the high 30s (30-wk ma and top of its uptrend channel). Failing to clear this key resistance has triggered a pullback to initial support at 10-wk ma (37.75) and below this to (Jul '17 and Nov '16 lows). A surge above this key supply is required to strengthen the recovery to mid-s. UBS Chief Investment Office Americas, Wealth Management 28 August

25 Texas Instruments Incorporated (TXN) 79/ / Sector Technology Last Sale Price $81.25 Rationale: Although the longer-term remains favorable, the near-term outlook is maturing as evidenced by a rising wedge. Failure to hold support at 79- and negative divergences between price and technical indicators (RSI/MACD), coupled with a negative outside month (Jun '17) and negative outside weeks (7/28/17, 8/11/2017), warn of a consolidation back to key initial support at (Jun/Jul '17 lows) and violation here hints of further downside risks to (38.2% retracement) and then to the mid-s. Above (Jun '17 highs) reaffirms the primary uptrend. United Parcel Service (UPS) 108/ / / Sector Industrials Last Sale Price $ Rationale: A negative outside week (12/16/16), coupled with a gap down on 1/31/2017, has pressured the stock to decline below 113 (Jan '17 low). The ability to find support near -101 (61.82% retracement from its Jan-Dec '16 rally and 2009 uptrend) prevented a deeper setback to An oversold rally from May '17 low (102.12) is now challenging key resistance at (Jan '17 gap down/jan '15 highs). A convincing breakout renders upside targets to (Dec '16 high). Failure to break out solidifies the right shoulder of a potential head/shoulders top pattern. UBS Chief Investment Office Americas, Wealth Management 28 August

26 United Technologies Corp (UTX) Sector Industrials Last Sale Price $ Rationale: This industrials name failed to surge above key supply at (Feb '15 high). A moderately overbought condition coupled with negative outside weeks (Jul/Aug '17) led to break of key initial support at (10-wk ma) and secondary support at 117 (30-wk ma). Violation here warns of a breakdown and suggests downside to (Apr '16/Aug '16 highs and extension of 2016 uptrend). Key resistance is (Jul '17 high). A breakout reaffirms the resumption of its primary uptrend and renders next targets to and then ( uptrend). Visa Inc Cl A (V) 98-99/ / Sector Technology Last Sale Price $ Rationale: The well-defined uptrend channel from 2008/2009 remains intact. An overbought condition, coupled with two negative outside weeks (6/9/17, 6/30/17), has prompted a pullback to key initial support at (10-wk ma and Jun '17 lows). The rally from the low-90s is now approaching key resistance at (2014/2016 uptrend). A breakout here renders upside targets to 115/. Although higher prices are prices are possible, an overbought condition may lead to a consolidation back to (10-wk ma) and below this to (30-wk ma) and then (2011/2014 uptrends). UBS Chief Investment Office Americas, Wealth Management 28 August

27 Verizon Communications Inc. (VZ) Source: FactSet, UBS as of 24 August /46/44 45/ /39 49/ /62.31 Sector Comm. Services Last Sale Price $48.31 Rationale: An island reversal (7/5/16), weekly death cross sell signal (Mar 17), and violation of (Apr '16 low/ May '16 low) led to a 21.9% correction that found support at 42.8 (Jul '17 lows). An oversold condition at low-s coupled with positive outside month (Jul '17) has triggered a rally back to retest (Apr'17 high). A breakout above (Apr '17 high) would stabilize the selling pressure and allow for a recovery to (Mar '17/Nov '14 highs) and then (Jan '17 high). But a breakdown below 10-wk ma (47.5) warns of downside risks to 44-45/42.. Wells Fargo & Co (WFC) 50-51/47 48/ / /73-74 Sector Financials Last Sale Price $52.16 Rationale: The recent rally from the Oct '16 low (43.55) has stalled near or the 2015/2017 highs. On a medium-term basis, a moderately overbought condition, coupled with a weekly death cross sell signal (5/19/17), has triggered a decline to key initial support at (Apr/Jun/Aug '17 lows). The ability to find support here may ignite another rally to key initial resistance at and above this 59- (2015/2017 highs). On the other hand, violation of key support in the low 50s warns of a decline to the mid-s (Aug '15 lows) and then the low s (Jul/Oct '16 lows). UBS Chief Investment Office Americas, Wealth Management 28 August

28 Exxon Mobil Corp (XOM) / / Technical rating Bearish Sector Energy Last Sale Price $76.33 Rationale: This energy name failed to clear or the 76.4% retracement from its rally. A lower-high pattern, coupled with a negative outside week (1/06/17), led to the breach of its key support near the extension of the uptrend. This technical action has weakened the intermediate trend. Near-term, a weakening relative strength (vs SPX) and weak price momentum led to violate the support at and warn of further downside risks to and then to (Aug '15 lows). However, an oversold condition may trigger a rally to -81 (10/30-wk ma). UBS Chief Investment Office Americas, Wealth Management 28 August

29 Appendix Description and Methodology This report provides technical analysis on a dynamic list of stocks that, we believe, are of a wide interest. Please note that technical views are highly variable and will change with market conditions. Accordingly, these ratings are only valid as of the publication date. Because CIO WMR equity sector analysts and WMR technical analysts employ different analytical methodologies, technical recommendations are, at times, contradictory to fundamental recommendations for the same security. For the latest company ratings by WMR sector analysts, please refer to the most recent equity sector research reports, located in the Equity Section on the Online Services Research website. For more background on the content of this report, please see Technical Analysis Research Primer, 18 February Appendix Term / Abbreviation Description / Definition % +or- Moving Avg (DMA) The percentage above or below the moving average (see Moving Average) is used to help measure an overbought or oversold condition and is a component of risk management. It is calculated by taking the difference between the group price and its 30-week moving average (see below), and then dividing by the 30-week moving average times. 30-Week Moving Average Adjusted Relative Strength (ARS) Base Beta Blow off stage to a major rally Breakdown Breakout Broadening Top Formation Also known as the 30-week line or 150-day line), this is one of the most popular and respected moving average indicators (see Moving Average) in technical circles. It is calculated by totaling the latest 30 weekly (usually Friday closing) prices and dividing by 30 to arrive at the average. Each week, the most recent week s figure is added to the total, and the price level from 30 weeks ago is subtracted hence the term moving. Please note that a breakout above or breakdown below this line does not, in and of itself, constitute a buy or sell signal. Number gives a 50% weighting to the 1-month relative strength, 30% to the 3-month, and 20% to the 6-month numbers to arrive at a single weighted number. A chart pattern marking a period of accumulation following a downtrend. The larger the base, the greater the upside potential following its completion. A base can take many forms. A measure of volatility of a security as it relates to the market as a whole. Beta is often calculated using regression analysis. A beta is basically the tendency of a security s returns to respond to swings in the market. A beta of 1 indicates that the security s price will move with the market. A beta of less than 1 means the security will be less volatile than the market. A beta of greater than 1 implies that the security s price will be more volatile than the market. This is often the last stage of a speculative bubble to a major rally. The blow off phase tends to be steep, but short-lived that often affords little opportunity for investors/traders to exit their positions. As price of a security or an asset advanced to an unsustainable level via a parabolic uptrend this give rise to the bursting of the speculative bubble resulting a quick and dramatic decline as investors/traders try to exit the market/security at the same time. A technical term indicating a downside resolution of a chart pattern. Its significance is determined by the same factors governing a breakout. A technical term indicating an upside resolution of a chart pattern. Breakouts can take many forms, and their degree of importance is determined by the significance of the chart pattern which preceded it. The Broadening top is a rare technical formation that resembles an inverted triangle pattern. It is formed by price swings that are increasingly widening and expanding volume. The most common of these broadening top patterns are the three ascending peaks and two descending troughs. The combination of wide price swings and increasing volume often convey an increasingly volatile and emotional market that's basically out of control. This pattern is often associated with market tops rather than market bottoms. The confirmation of the Broadening top occurs when the price violates the second of these two troughs. UBS Chief Investment Office Americas, Wealth Management 28 August

30 Appendix Channel Death Cross Downtrend Line Fan reversal pattern Fibonacci Retracement Level FSR Gap Golden Cross Head-and-Shoulders Pattern Internal Trend Line Linear Regression Band Moving Average (m.a.) MRA A chart pattern comprised of two parallel trend lines, which form a trading band. Channels take the form of uptrend, downtrend and horizontal. The opposite of a golden cross, this is a crossover on the chart resulting from a security s shorterterm moving average falling below its longer-term moving average. Technicians often see this as a bearish technical sign indicating the market has turned negative on the security. A trend line connecting successively lower peaks for a stock (or market). Its technical significance is determined by the same factors governing an uptrend line. The fan formation is a technical pattern that is based on the use of multiple trend lines to denote a major trend reversal. The fan pattern gets its name as it basically resembles a fan. It should have a minimum of three trend lines (uptrends or downtrends). The break out/break down of the third downtrend/uptrend often completes the fan pattern and signals the start of a major trend reversal. The starting point of these trend lines should come from a significant peak or a significant trough. A technical analysis term used to describe potential areas of support (price stops declining) or resistance (price stops rising) on the charts. After a strong rally or decline there is a tendency for a security to retrace a certain portion of its prior move (up or down). Fibonacci retracements use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before continuing in the original direction. These levels are computed by taking the two extreme points and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and %. Forecast Stock Return is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. An open space in a chart created when a stock (or market) opens either higher than its highest level attained during the prior session (referred to as a gap up or an upside chart gap) or lower than its lowest level reached during the prior day (called a gap down or a downside chart gap). Some gaps are caused by events and should be ignored: ex-dividend gaps, new share issues, and expiration of futures contracts. A crossover on the chart that involves a security s shorter-term moving average (such as the 50-day moving average) crossing above its longer-term moving average (such as the 150-day or 200-day moving average). Technicians often interpret this crossing of two moving averages as a bullish technical sign that suggests the market has turned in favor of the security. This technical formation is one of the best known of the reversal patterns. There are two types of head-and-shoulders patterns that often appear on the charts H/S top and H/S bottom. Both of these patterns often denote the process of a reversal either from a bullish or bearish trend. Headand-shoulders formation often is comprised of a left shoulder, a head, and a right shoulder, and a line drawn across its shoulders defines its neckline. The breaking of the neckline to the upside confirms a head-and-shoulders bottom breakout, which signals the start of a bullish reversal favoring higher prices. The violation of neckline to the downside validates a head-and-shoulders top, reaffirming a bearish reversal of lower prices. A single trend line connecting at least several high and low points for a stock (or market) over time. A common statistical technique often used by investors/traders to better forecast values by utilizing the least squares fit method to plot a trend line. A linear regression band consists of upper and lower bands. These bands are calculated by computing the number of standard deviations above or below of the regression line. This is a technical indicator frequently used in technical analysis to show the average value of a security s price over a set period of time. This tool is designed to smooth out a stock s (or market s) shorter-term fluctuations to provide a better picture of an underlying trend. Moving averages generally are used to measure momentum and define areas of possible support and resistance. Moving averages can be helpful as they emphasize the direction of the dominant or prevailing trend and also tend to smooth out price and volume fluctuations, or noise, giving the trader or investor a clearer picture of the security in question. Many moving averages exist. Market Return Assumption is defined as the one-year local market interest rate plus 5% (a proxy for the equity risk premium and not a forecast). UBS Chief Investment Office Americas, Wealth Management 28 August

31 Appendix Neckline Support/Resistance Overbought Oversold Positive/Negative Outside Day This is a trend line that is drawn across the bottoms or tops of the left shoulder, the head and the right shoulder of a potential head-and-shoulders bottom or top pattern. When prices break through this neckline support level and continue falling after forming the right shoulder, it confirms a headand-shoulders top formation. Conversely, neckline resistance is a trend line drawn across the tops of the left shoulder, the head and the right shoulder. When prices break above this neckline resistance level and keep on rising, it typically completes the head-and-shoulders bottom pattern. A technical condition in which the price of a security has risen to such a degree that the price becomes overvalued or has reached the upper band of its trading range resulting in a potential pullback in price. Opposite of Overbought. A technical condition that occurs when the price of a security has fallen to such a degree that the price becomes undervalued or has reached the lower band of its trading range prompting a potential rally. When one day s range (high and low) exceeds the prior day s range, and the stock (or market) in question closes near its daily peak, this is referred to as a positive outside day. A negative outside day would be recorded if the stock (or index) finished near its daily low after having a wider range than the prior session. The same rule can be applied on a weekly and monthly basis as well. Relative Strength Relative strength is a performance comparison between a sector, group, or stock and the S&P 500 Index over a specified time frame. Our time frame is often a one-, three-, and six-month basis but does vary according to investment orientation. RRD Support Top Triangle Patterns Rating/Return Divergence is automatically appended to the rating when stock price movement has caused the prevailing rating to differ from that which would be assigned according to the rating system and will be removed when there is no longer a divergence, either through market movement or analyst intervention. An area where increased buying interest is likely to develop during a decline. These points, which can take several forms (minor, major, etc.), often provide downside protection for an issue in a primary uptrend, but only temporary relief to an issue in a primary uptrend, during which time many support levels are often broken. A chart pattern marking a period of distribution following an uptrend. The larger the top, the greater the downside potential following its completion. It, too, can take many forms. There are three different types of Triangle patterns Symmetrical, Descending and Ascending. Symmetrical Triangle is considered to be a continuation pattern that often signals a period of consolidation in a trend followed by a resumption of the prior trend. It is formed by the convergence of a descending trend and an ascending trend. An Ascending Triangle is a bullish pattern, which is denoted by two trend lines a flat trend line and an ascending uptrend line. A Descending Triangle is a bearish pattern. It is the opposite of the Ascending Triangle in that there is a flat trend line and a downward sloping downtrend line. UBS Chief Investment Office Americas, Wealth Management 28 August