Technical Review of Stocks

Transcription

1 Update March 16 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 Venkat Badri, 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 42.

2 Table of Contents Ticker Name Page Ticker Name Page AAPL APPLE 4 JNJ JOHNSON & JOHNSON 21 ABBV ABBVIE INC 4 JPM JPMORGAN CHASE & CO 22 ABT ABBOTT LABORATORIES 5 KHC KRAFT HEINZ COMPANY 22 ACN ACCENTURE 5 KO COCA-COLA CO 23 ADBE ADOBE 6 LOW LOWE'S 23 AET AETNA INC 6 MCD MCDONALD'S CORP 24 AGN ALLERGAN 7 MDLZ MONDELEZ INTERNATIONAL INC 24 AMAT APPLIED MATERIALS INC 7 MDT MEDTRONIC INC 25 AMGN AMGEN INC 8 MMM 3M CO 25 AMZN AMAZON.COM INC 8 MO ALTRIA GROUP INC 26 BA BOEING 9 MRK MERCK & CO 26 BAC BANK OF AMERICA 9 MSFT MICROSOFT INC 27 BMY BRISTOL-MYERS SQUIBB CO 10 NKE NIKE INC 27 BRK.B BERKSHIRE HATHAWAY - CLASS B 10 OXY OCCIDENTAL PETROLEUM CORP 28 CELG CELGENE CORP 11 PCLN PRICELINE 28 CL COLGATE-PALMOLIVE CO 11 PEP PEPSICO INC 29 CMCSA COMCAST CORP 12 PFE PFIZER INC 29 CNC CENTENE 12 PG PROCTER & GAMBLE CO CPB CAMPBELL SOUP CO 13 PM PHILIP MORRIS INTERNATIONAL CSCO CISCO SYSTEMS INC 13 RHT RED HAT 31 CVS CVS CAREMARK CORP 14 SBUX STARBUCKS 31 CVX CHEVRON CORP 14 SLB SCHLUMBERGER LTD 32 DIS THE WALT DISNEY COMPANY 15 SO SOUTHERN CO 32 EMC EMC CORP/MA 15 T AT&T INC 33 EOG EOG RESOURCES INC. 16 TMO THERMO FISHER SCIENTIFIC 33 ESS ESSEX PROPERTY TRUST 16 TXN TEXAS INSTRUMENTS INC 34 FB FACEBOOK INC 17 UPS UNITED PARCEL SERVICE 34 FDX FEDEX 17 UTX UNITED TECHNOLOGIES CORP 35 GE GENERAL ELECTRIC CO 18 V VISA INC-CLASS A 35 GILD GILEAD SCIENCES INC 18 VFC VF CORP 36 GOOGL ALPHABET INC 19 VMW VMWARE INC 36 HD HOME DEPOT INC 19 VZ VERIZON COMMUNICATIONS INC 37 HON HONEYWELL INTERNATIONAL INC WFC WELLS FARGO AND CO 37 IBM INTL BUSINESS MACHINES CORP WWAV WHITEWAVE FOODS 38 INTC INTEL CORP 21 XOM EXXON MOBIL CORP 38 The last update on these stocks was published on either 29 February 16 or 17 February 16. Going forward, our previously published rating for these stocks should not be relied upon. UBS CIO WM Research 21 March 16 2

3 Changes since last report Additions Name LOWE'S THERMO FISHER SCIENTIFIC VF CORP Deletions Name APACHE AMERICAN EXPRESS CO ASTRAZENECA PLC FRANKLIN RESOURCES INC BP PLC CITIGROUP INC CATERPILLAR INC CONOCOPHILLIPS COSTCOWHOLESALE CORP CSX CORP CENTURYLINK INC DOMINION RESOURCES INC DU PONT (EI) DE NOMOURS DEERE AND CO DIAGEO PLC DOW CHEMICAL DUKE ENERGY CORP FORD MOTOR CO GENERAL MILLS INC GLAXOSMITHKLINE PLC HALLIBURTON ILLINOIS TOOL WORKS INC INVESCO KIMBERLY-CLARK CORP L BRANDS INC ELI LILLY LAM RESEARCH CORP LULULEMON ATHLETICA MCGRAW HILL FINANCIAL NEXTERA ENERGY INC NESTLE SA/AG NOVARTIS AG ORACLE CORP ROYAL DUTCH SHELL PLC SANDISK CORP ST JUDE MEDICAL INC TEVA PHARMACEUTICALS TARGET CORP TOTAL SA TRAVELERS U.S. BANCORP VODAFONE GROUP PLC WALGREENS CO WAL-MART STORES INC Ticker LOW TMO VFC Ticker APA AXP AZN BEN BP C CAT COP COST CSX CTL D DD DE DEO DOW DUK F GIS GSK HAL ITW IVZ KMB LB LLY LRCX LULU MHFI NEE NSRGY NVS ORCL RDSA SNDK STJ TEVA TGT TOT TRV USB VOD WBA WMT Technical Rating Changes Name Ticker Old New GILEAD SCIENCES INC. GILD Bullish Neutral Note: With this issue, we have combined the two reports into one. UBS CIO WM Research 21 March 16 3

4 Apple Inc (AAPL) / / / Sector Technology Last Sale Price $105. Rationale: A Jul '15 negative outside month and a subsequent violation of triggered a -32% decline to a low of 92 (Aug '15). The ability to find support at or the extension of the 14 triangle breakout and the % retracement from its rally led to a technical rally towards the low-s (Nov '15 high). Soon after, increased broader market volatility led to a well-defined downtrend from Nov '15 to Jan '16. Despite a recovery from low-90s, a convincing move above low-s is needed to negate head/shoulder top pattern. AbbVie Inc (ABBV) Jan '13 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '15 Oct '15 Jan ' / Sector Healthcare Last Sale Price $55.32 Rationale: The Aug '15 uptrend channel breakdown at 59.5 (Sep '15) coupled with a weekly death cross sell signal and negative outside weeks (7/24/15 and 8/21/15) confirm a top. After declining 36.5% from its Jul '15 high to a low of (Oct '15) a deeper oversold condition triggered a technical rally to key resistance along the low-to-mid s (Nov '15/Jan '16 high) or to its 61.8% retracement from the Jul-Oct '15 decline. The low-s is now major resistance. A wide trading range is now likely between mid-to-high s and the mid-s. UBS CIO WM Research 21 March 16 4

5 Abbott Laboratories (ABT) /51.74 Sector Health Care Last Sale Price $.29 Rationale: A negative outside week on 8/14/15, coupled with a large gap down on 8/24/15 and a weekly death cross sell signal led to 24.62% correction from its Jul '15 high (51.74) to its Oct '14 low (39). A deeply oversold condition has triggered a technical rally. A failure to sustain within the 11 uptrend channel coupled with the Jan '16 gap down ( ) and 1/29/16 negative outside week led to a major test of support at or 61.8% retracement from rally. We think a range bound trading environment between mid-s and mid-s/low-s is most likely. Accenture PLC (ACN) / / Sector Technology Last Sale Price $ Rationale: We remain Bullish on Accenture on an intermediate-to-longer term basis as long as it retains the bottom of its 5-year uptrend channel as well as the extension of its 2-year ascending triangle breakout along the low-90s. Although ACN failed to clear above the top of its channel at late last year a convincing breakout renders upside targets to and above this to , over time. On the other hand, the Dec '15 and Feb '16 negative outside month patterns does not rule out consolidation before a convincing breakout above , initial resistance. UBS CIO WM Research 21 March 16 5

6 Adobe (ADBE) / / / / Sector Technology Last Sale Price $89.96 Rationale: The S&P Software and Services sector has been a relative outperformer in the market for the past 7 years and continues to perform well in relationship to S&P peers. However, the sharp Nov '15 to Feb '16 broad market correction has also negatively impacted ADBE as it briefly slipped below its 13 uptrend near Nonetheless, a solid bounce back from key support level has triggered a rally back to or the 10-wk/-wk moving averages. A convincing surge above the moving averages can help to sustain the rally to and then to Aetna Inc (AET) / Sector Healthcare Last Sale Price $ Rationale: The healthcare sector including AET has also come under selling as AET has declined.42% from its record high of 134. (Jun '15) to an Aug '15 low of Negative outside week patterns on 8/21/15, 9/25/15, 12/3/15 and on 1/29/16 as well as a negative outside month on Jan '16 continue to warn of further volatility. Interestingly, an equally solid rally from Feb '16 low not only recovered most of its losses from Nov '15 high, but also exhibited a positive outside month pattern. More recently, a positive outside week on 3/11/16 keeps bulls optimistic on the stock. UBS CIO WM Research 21 March 16 6

7 Allergan (AGN) / Sector Healthcare Last Sale Price $272. Rationale: The.2% decline from Jul-Oct '15 has weakened it near-to-intermediate term trend. In the process, the pivotal 13/15 uptrend channel at gave way under Sep-Oct '15 broad market correction. However, the ability to quickly surge back above its breakdown and a subsequent gap up on 10/29/15 as well as the Oct '15 positive outside month pattern suggest a consolidation. We expect a near-term trading range to develop between 2-2 and More recently, the 3/11/16 positive outside week pattern keeps bulls optimistic on the stock. Applied Materials Inc (AMAT) / /14.25/ Sector Technology Last Sale Price $.28 Rationale: Failure to clear above key resistance near the 38.2% retracement from (26.4) has led to a 44.6% correction from the Dec '14 high. In the process, a number of key supports including the 13 uptrend near 22 have been breached. The Mar '15 negative outside month and a large gap down in Apr '15 extended losses. Still, a % rally from levels (Aug '15 low) is encountering resistance near the % retracement from the Dec '14-Aug '15 decline (19.98). A convincing move above low-s coupled with the Feb '16 positive outside month keeps bulls optimistic. 8 UBS CIO WM Research 21 March 16 7

8 Amgen Inc. (AMGN) /- 2 / Sector HealthCare Last Sale Price $ Rationale: We maintain a cautiously optimistic technical view on AMGN as the stock still retains its primary uptrend. However, a broadening wedge warns of a maturing rally. The selling in Sep '15 may have found key support near 1.09 or just above its Oct '14 low (127.67), 38.2% retracement (1.) from its rally and the bottom of 13 uptrend channel. A successful test here can trigger a technical rally to the low-1s. In the near-term, a negative outside week on 1/26/16 can lead to further consolidation. Key support is at or near the Oct '14/Sep '15 lows. Amazon.com Inc. (AMZN) / Sector C. Discretionary Last Sale Price $ Rationale: A 31.94% decline from the Dec '15 high or levels to the Feb '16 low or 474 tested the conviction of the bulls amidst increased sector and broader market volatility. In due course, the stock appears to have found support near the bottom of the nine month symmetrical tringle pattern near 474 (shown above). Despite a % rally from Feb '16 lows, a convincing move above low-0s sets the motion towards previous highs. A failure to do so would indicate a movement within 1 year head and shoulder top pattern and potential for further consolidation. UBS CIO WM Research 21 March 16 8

9 Boeing (BA) / Sector Industrials Last Sale Price $1. Rationale: After appreciating nearly 447% in the past 7 years the rally has slowed over the past year or so and hence our Neutral technical outlook. A complex head/shoulders top pattern over the past two years warns of a maturing uptrend. The outcome of this formation will help to determine the next trend. Although the ability of BA to find pivotal support near its 09 uptrend at prevented a deeper setback, it still needs to surge above (-wk ma) to allow for the resumption of the primary uptrend and a retest of 1/159. Initial support is at Bank of America Corp (BAC) Sector Financials Last Sale Price $13. Rationale: We maintain a Neutral technical stance as BAC has broken major support along the bottom of a welldefined 2-year trading range. Despite a positive outside month on Oct '15, the stock failed to follow through with a breakout above the top of its trading range at A subsequent Nov '15 to Feb '16 market correction resulted in the violation of bottom of its channel ( ). A.53% decline from Jul '15 high created a deeply oversold condition that prompted a rally to the 38.2% retracement (13.85) of Jul '15 to Feb '16 declines. Initial support is UBS CIO WM Research 21 March 16 9

10 Bristol-Myers Squibb Co (BMY) / Sector HealthCare Last Sale Price $61.47 Rationale: A 343% rally from the 08 bottom (16) has led to an overbought condition. The 7/24/15 negative outside week and a subsequent Jul '15 negative outside month triggered a sharp setback of 26.5% back towards the bottom of its 11/13 uptrends along the low-to-mid s. A successful test of support has ignited another rally. Having said that, a negative outside week on 12/18/15 followed by the Jan '16 gap down led to an % decline from Dec '15 high (.87). Having said that, a convincing move above mid-s could invite fresh bullish interest in the stock. Berkshire Hathaway Inc. Class B stock (BRK.B) / / /165 Sector Financials Last Sale Price $142. Rationale. A violation of the 13 uptrend at and a subsequent weekly death cross signal warn of a maturing trend. Although the longer-term trend is still favourable and relative strength against SPX is positive, a convincing violation of would confirm a top and warn of a deeper setback towards and below this to Having said that, a 19.22% decline from Dec '14 highs has created an oversold condition and the recent Feb '16 positive outside month prompted a rally to the 61.8% retracement (141.71) of decline. UBS CIO WM Research 21 March 16 10

11 Celgene Corp. (CELG) / /141 Sector HealthCare Last Sale Price $96.69 Rationale: We maintain a Neutral technical stance on CELG as the recent breakdown below the low-s or the 12 uptrend warns of a waning bull trend. A large head and shoulders top pattern has developed with key neckline support at or the 15/16 lows. Also note that 38.2% retracement from rally is at 94 providing pivotal support. A weekly death cross sell signal and a negative outside week (1/29/16) further hint of a top. Key initial resistance is at or the 38.2% retracement from Jul-Aug '15/Feb '16 decline. Colgate Palmolive Co (CL) / Sector Cons. Staples Last Sale Price $69.86 Rationale: This consumer staples stock has also succumbed to selling pressure during the Aug '15 as it briefly violated the bottom of its pivotal 11and 09 uptrend channels at and -62, respectively. However, a positive outside week on 1/22/16 (low-s) reinforce a still bullish intermediate-to-longer term uptrend. Nonetheless, a potential head/shoulders top pattern has developed in the past 2-years. Breakout above initial resistance at confirms the resumption of the primary uptrend and upside to mid-to-high s or the 10-/- wk ma is initial supply. UBS CIO WM Research 21 March 16 11

12 Comcast Corp. Cl A (CMCSA) / Sector Cons. Disc. Last Sale Price $.75 Rationale: We retain a cautiously optimistic technical outlook on CMCSA. However, on a near-term basis, the lack of a follow through to the late summer's breakout to was short lived as this stock has struggled to retain its prior highs. Despite the relative outperformance of the stock (vs SPX), a trading range has developed between the low-s and the low-to-mid s. Violation of 49- confirms a technical breakdown and suggests downside risks to the and below this to the low-to-mid s. A breakout above suggests the resumption of primary uptrend. Centene (CNC) / / / Sector Healthcare Last Sale Price $56.18 Rationale: After declining nearly 43% from its Jul '15 high (83) this Healthcare name has maintained above crucial support along the low-to-mid s or above the top of the 11/12 internal channels. The next key challenge is to trade convincingly above key initial resistance in the low-to-mid s or the 10-wk/-wk ma and the 15 downtrend. A breakout here can lead to the next rally. On the downside, two negative outside weeks (1/8/16 and 2/5/16) suggest a potentially near-term volatile trading range environment developing between the mid-to-high s and the low-to-mid s. 10 UBS CIO WM Research 21 March 16 12

13 Campbell Soup Co. (CPB) /55/ / / / /85-86 Sector Cons. Staples Last Sale Price $64.37 Rationale: An ascending triangle breakout during 13 (above the high-s) and a subsequent breakout above two and half year accumulation pattern above high-s in mid-15 substantiate our Bullish technical outlook on this Food Beverage and Tobacco name. However, a moderately overbought condition has led to a near-term pull back to its prior breakout. Nonetheless, 11//15 positive outside week, gap up on 11/24/15 and a positive outside month pattern in Nov '15 and again in Jan '16 keep us optimistic. Initial support now lies at 59- or near the Mar '16 low. Cisco Systems Inc (CSCO) / Sector Technology Last Sale Price $28.19 Rationale: We maintain an optimistic stance on this important technology name as long as it retains the uptrend along the low-s ( ). However, a negative outside week (3/6/15) and a negative outside month (Aug '15) have slowed the 7-year recovery. Having said that, a large positive outside week pattern on 2/12/16 not only helped the stock to clear above its -week ma and the Jan '16 gap down ( ), but also reaffirm the resumption of the intermediate term uptrend. Initial supply is at or the 15 downtrend. Above this.31 is secondary supply level. UBS CIO WM Research 21 March 16 13

14 CVS Caremark Corp. (CVS) / / Sector Cons. Staples Last Sale Price $ Rationale: A breakout above the top of the 12 channel at and a gap up on 1/8/15 propelled CVS to record highs. After making a high of during Aug '15, the trend suddenly reversed direction, falling 28.4% in a series of multiple gap downs in 15-days. However, the selling soon stabilized at 81.3 setting into motion the current recovery from Aug '15/Feb '16 lows. In addition, the Feb '16 positive outside month pattern keeps bulls optimistic. Sustainability of the stock above 98- can strengthen the recovery to initial resistance at or the Oct '15 high. Chevron Corp (CVX) Sector Energy / / / /135.1 Last Sale Price $96.89 Rationale: Violation of the bottom of its 11 uptrend channel at followed by a negative outside week (5/1/15) and violation of the Dec '14/Jan-Mar '15 lows at 98- have triggered a 48.5% decline (from its Jul '14 highs) to Aug '15 low of An extremely oversold condition coupled with a successful test of major support at.55 (61.8% retracement from rally) triggered a technical rally to by Nov '15 or near the 38.2% retracement from Jul '14-Aug '15 decline and the Jul '15 downtrend. A convincing move above +/- 2 could strengthen recovery process. UBS CIO WM Research 21 March 16 14

15 The Walt Disney Co (DIS) / / Sector Cons. Disc. Last Sale Price $99. Rationale: We maintain a Neutral technical outlook on this Consumer Discretionary name as a gap down in Jan '16, a death cross signal and the violation of its 11 uptrend near 98 warn of a medium term top. DIS has also violated its Aug '15 lows at setting into motion a lower low as it fell to next key support at or the 38.2% retracement from rally. The ability to find support here triggered a technical rally to or the 10-wk ma and its prior breakdown. The -wk ma and Jan '16 gap down at remains key resistance. EMC Corp (EMC) / Sector Technology Last Sale Price $26.45 Rationale: A pending deal and related news flow can still influence this stock over the near-to-medium term. We retain a Neutral technical outlook for this Technology Hardware name based primarily on a 4-year trading range between the low-s and the low-s. The % decline during 15 may be setting into motion an even tighter trading band between or the late-15/16 lows and or the Sep '12/Mar '14/Aug '15/Oct '15 highs. This short-term trading range resembles a potential head/shoulders top pattern with pivotal neckline support at UBS CIO WM Research 21 March 16 15

16 EOG Resources (EOG) / / /96-98 Sector Energy Last Sale Price $76. Rationale: Three weekly death cross sell signals (14/15), violation of the 12 uptrend (97-98), negative outside month (May '15), monthly death cross sell signal in Sep '15, and a large 2-year head-and-shoulders top breakdown (85-87) confirm a major top and suggest downside to the low-s. Nonetheless, the 1/22/16 positive outside week and a successful test of the bottom of downtrend channel (57-58) trigger a rally to the low-to-mid s (23.6% retracement from decline and -wk ma) and then to high-s. The Mar '16 positive outside month keeps bulls optimistic. Essex Property Trust (ESS) / / Sector Financials Last Sale Price $ Rationale: A multi-year breakout during 12 at (not shown) confirms a major breakout and renders upside targets to ESS basically achieved its technical target when it rallied to (Mar '15) and again to (Jan '16). Based on the % rally since 09 bottom (49.19) a high level consolidation can be expected between and This is needed to alleviate an overbought condition. Having said that, an impressive bounce back from Feb '16 lows and superior relative performance of the stock keeps bulls optimistic is key supply. UBS CIO WM Research 21 March 16 16

17 Facebook Inc. (FB) Jul '12 Oct '12 Jan '13 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '15 Oct '15 Jan ' / /145 Sector Technology Last Sale Price $ Rationale: The primary trend (starting from May '12) remains bullish and a breakout above 45 during Sep '14 led to an even steeper uptrend channel between low-90s and high-s. The 27.5% correction from its Jul '15 high (99.3) to its Aug '15 low (72) has set the stage for the next rally. In due course, a breakout above the top of its 13 uptrend channel led to a new all-time high of (Feb '16). We think a convincing move above or the Feb '16 high could invite fresh bullish interest. The Jan '16 positive outside month pattern keeps bulls optimistic on the breakout. FEDEX Corp. (FDX) Sector Industrials Last Sale Price $ Rationale: We remain favourable on the longer-term technical outlook on this freight and logistics company as long as it retains its multi-year breakout above (late-13). However, after a 444% rally from the 09 lows, increased volatility hinted of a maturing trend. In addition, a sharp 35.36% decline from Jun '15 high (185.19) to Jan '16 low (119.71) has achieved its downside target and the stock appears to be consolidating between 110- and 1-1. A convincing move above mid-1s could lead to a retest of its all-time highs at (Jun '15 high). UBS CIO WM Research 21 March 16 17

18 General Electric Co (GE) / / /42.08 Sector Industrials Last Sale Price $.96 Rationale: The 00 downtrend breakout above 26.5 in Nov 13 (not shown), the gap up breakout in 4/10/15 ( ), and the surge above the 61.8% retracement (28.19) from the decline, are all technically significant as they confirm a longer-term recovery. Although the two broad market corrections in the past year have also impacted GE, resulting in a 26.4% decline to a low of 19.37, we are encouraged by the recent recovery back to its 15 highs. However, the Jan '16 negative outside month pattern warns of a trading range between and Gilead Sciences Inc. (GILD) Source: FactSet, UBS, as of 25 January / / /123.4 Sector HealthCare Last Sale Price $89.53 Rationale: We recommend downgrading to a Neutral outlook on this health care name from an intermediate-term perspective. GILD rallied 94.28% from its Apr '14 low (63.5) recording a record high of on Jun '15. An overbought condition has led a consolidation between the mid-s and Similar to many Biotechnology names a large broadening top as well as a head/shoulders top have developed. Failure to maintain key support at low-to-mid s confirms a neckline breakdown. A technical oversold rally to may encounter another round of selling. UBS CIO WM Research 21 March 16 18

19 Alphabet Inc (GOOGL) / / / Sector Technology Last Sale Price $ Rationale: The 2-year downtrend channel breakout in Jul '15 is technically significant as this signals the re-emergence of a leadership technology name. An overbought condition soon developed that led to a consolidation (see red circle) between high-0s and low-0s from mid-jul to mid-oct '15. Soon after, a gap up on 10/23/15 extended the rally and a surge above (Oct '15 high) led to a new all-time high of (Feb '16). In the near-term, the stock paints a mixed picture, with the Feb '16 negative outside month followed by 3/11/16 positive outside week pattern. Home Depot (HD) / / /156 Sector C. Discretionary Last Sale Price $1.88 Rationale: We retain a technical Bullish outlook on this Home Improvement retailer but recognize the rally over the past 2-years has achieved our technical target of 123 (based on the 13 breakout above ). We think higher prices are still possible back to its prior 15 highs at Above this, the stock enters uncharted territory. Although a decline over three months starting from Dec '15 till Feb '16 and 2/5/16 negative outside week tested the conviction of the bulls, a solid rally from Feb '16 low keeps bulls optimistic. Initial supply is or the 10-/- wk ma. UBS CIO WM Research 21 March 16 19

20 Honeywell International Inc. (HON) / Sector Industrials Last Sale Price $ Rationale: We maintain a Bullish technical outlook on this Industrials name. A 13-year breakout at 63/69 during the late-12/early-13 (not shown) renders targets to An ascending triangle breakout above renders upside to , longer-term. In addition, continued relative outperformance (vs SPX) keeps us optimistic. Initial support is at -103 or near the 10-/- wk ma. Below this, or the 23.6% retracement from rally and the Jan '16 lows is secondary support. Initial resistance is at or the Feb '16 highs. International Business Machines Corp (IBM) / Sector Technology Last Sale Price $ Rationale: A 45.85% decline from the March 13 highs or levels to as low as or the Feb '16 low appears to have created deeply oversold levels. A strong recovery from Feb '16 lows coupled with a large gap up on 2/18/16 hints of solid base in the making. Although it is too early to call it a reversal, we think risk-reward looks attractive. Key initial support now lies at or the 2/18/16 gap up range. Below this, secondary support lies at or near the Jan/Feb '16 lows. To the upside, initial supply lies at or near the Oct '15 highs. UBS CIO WM Research 21 March 16

21 Intel Corp (INTC) 28 +/ Sector Technology Last Sale Price $31.98 Rationale: We were encouraged by the 12-year inverse head-and-shoulders breakout above (not shown) in Jun '14. However, a 28.43% decline from the May '15 high of warned of a false breakout. The stock s ability to find support near the mid-s prevented a deeper setback, prompting another sharp rally of 41% from its Aug '15 lows (24.87). Despite the 11//15 positive outside week, a failure to break above 14 high (37.9), the Jan '16 gap down and 2/5/16 negative outside week hints of consolidation. A trading range is now likely between 28 +/-.5 and Johnson and Johnson (JNJ) / / / Sector Healthcare Last Sale Price $ Rationale: We keep a Bullish technical outlook on JNJ. A large multi-year technical base breakout above the low-tomid s achieved one of our medium term technical targets of the low-110s during Nov 14 (109.5). An overbought condition coupled with a weekly death cross sell signal promptly led to a correction. After declining 25.3% to (Aug '15) JNJ quickly generated a strong recovery that is now challenging its Nov '14 highs or its prior all-time highs (109.5). A breakout here confirms the start of the next major rally. Initial support is -102 or the 10-/- week ma. UBS CIO WM Research 21 March 16 21

22 JPMorgan Chase & Co (JPM) / /90-92 Sector Financials Last Sale Price $58.75 Rationale: We keep a Neutral technical view on this Financial name. A multi-year breakout above in mid-13 transitioned the stock into a new 2+ year uptrend channel. A rally to the top of the channel near the low-s led to an overbought condition which in turn led to recent 29.1% sell-off from the Jul '15 high (.61) as it declined to.07 (Aug '15). Despite the Oct '15 positive outside month, a weekly death cross signal coupled with a gap down in Jan '16 and relative weakness (vs SPX) suggest a trading range between low-s and mid-s is key supply level. Kraft Heinz Company (KHC) / Sector Cons. Staples Last Sale Price $78.01 Rationale: We keep our Bullish technical outlook on KHC. A 35% gap up on 3/25/15 after Heinz and Kraft Foods announced a merger to form the Kraft Heinz Co. set the tone for the Bulls, as evidenced by a bullish flag pattern. However, failing to follow through with this bullish pattern, a subsequent large gap down (-17.27%) on 7/6/15 warned of a correction. However, a gradual recovery from Aug '15 lows, 1/22/16 positive outside week, the subsequent positive outside month and a large gap up ( ) on 2/26/16 hints of a move above low-s. UBS CIO WM Research 21 March 16 22

23 Coca Cola Co (KO) / / /68- Sector Cons Staples Last Sale Price $45.77 Rationale: We maintain a Bullish technical view on this consumer staples name. A move above 45 confirms a breakout of longer-term accumulation pattern and also a 3-plus year trading range between mid-to-high s and the mid-s. In addition, a golden cross technical buy signal; continued relative outperformance (vs SPX) and a recent positive outside week (2/12/16) also bode well for higher highs. As the stock enters uncharted territory, we urge investors to use risk management techniques to protect gains. Initial support lies at or the Jan/Mar '16 lows. Lowe's (LOW) Source: FactSet, UBS, as of xx March / / /104 Sector C. Discretionary Last Sale Price $74.02 Rationale: We initiate Lowe's with a technical Bullish rating. The primary trend starting from 1996 lows connecting 08/11 lows remains intact. A 1% rally from 09 lows seems to have created an extremely overbought condition that led to consolidation between low-s and high-s over the past year. Having said that, we prefer to stay with the bulls as the stock continues to trade within the rising channel despite the near-term broader market volatility. In addition, continued relative outperformance (vs SPX) over the past 4+ years keeps bulls optimistic on the stock. UBS CIO WM Research 21 March 16 23

24 McDonald s Corp (MCD) 117 +/ / /1 Sector C. Discretionary Last Sale Price $ Rationale: We retain a technical Bullish rating on this Restaurant name. A convincing surge above confirms a (gap up) breakout of the top of a well-established 5-year technical base. This major breakout is technically significant as this renders next upside target to (intermediate), and 1 (longer-term). Having said that, a negative outside week on 2/5/16 and the subsequent Feb '16 negative outside month hints of consolidation. More recently, a positive outside week pattern on 3/4/16 keeps bulls optimistic on a breakout above the initial supply at (Feb '16 high). Mondelez International Inc (MDLZ) / /59 Sector Cons. Staples Last Sale Price $.78 Rationale: We remain cautiously optimistic on MDLZ. A key breakout of an 11-year technical base in Mar 13 above supports our Bullish outlook. The stock has witnessed a steady rise over the past few years before finally breaking out, and witnessed a high level consolidation between Jul '14 and May '15. The mid-may '15 breakout above reinforced the primary uptrend. While the Aug '15 negative outside month and the Jan '16 gap downs may signal another consolidation phase, a solid recovery from 11 uptrend hints of accumulation near key support levels. UBS CIO WM Research 21 March 16 24

25 Medtronic Inc. (MDT) +/- 2 / / /91 95/ Sector HealthCare Last Sale Price $75. Rationale: This Healthcare name confirmed a major breakout above its 00/06 highs (-62) in Jan/Apr 14. In addition, positive outside months on Aug '14, Oct '14, and May/Jul '15 and the stock s relative outperformance versus SPX favor higher prices over the intermediate-to-longer term. That said the negative outside month pattern during Aug '15 has led to a wide trading range between the mid-to-high s and the mid-to-high s. The stock paints a mixed picture in the near-term with Feb '16 positive outside month followed by 3/4/16 and 3/18/16 negative outside weeks. 3M Co (MMM) /1 +/ / Sector Industrials Last Sale Price $ Rationale: An inverse head and shoulder pattern breakout dating back to 04 (not shown) ignited a strong rally that achieved a new all-time high at 1.5 (Mar '15). Soon after, a weekly death cross sell signal (May '15) led to a 21.4% decline to its Aug '15 low of 134. A gap up (10/5/15) and a positive outside week (10/23/15) led to a rally towards key resistance at 1. However, failure to breakout coupled with a potential head/shoulders top led to a retest of neckline support (134.64) before witnessing a bounce back. A move above 1.5 could invite fresh bullish interest in the stock. UBS CIO WM Research 21 March 16 25

26 Altria Group Inc. (MO) 56/ /85 Sector Cons Staples Last Sale Price $62.33 Rationale: MO appears to be negating its 09 broadening wedge pattern (shown above). More recently, a breakout above the top of its 1-year trading range at as well as a weekly golden cross buy signal in the mid-aug '15 and the negation of the Mar/Aug '15 negative outside months as well as the Jan '16 positive outside month hint of higher prices. The recent breakout renders upside targets to the mid-s (near-term), low-s (medium term) and then to the low-s (long-term). Initial support is or 10-wk ma. Key support is 56 or the Dec '15/Jan '16 lows and -wk ma. Merck & Co (MRK) / /71-72 Sector Healthcare Last Sale Price $51.53 Rationale: The breakout of the 00/07 downtrend (not shown) above low-s signals a longer-term recovery. However, the recent 11 uptrend channel breakdown (mid-s) weakens the medium-term technical outlook. Negative outside months (Jun/Aug '15) and rolling of key moving averages led to a sell-off. The 10/16/15 positive outside week pattern helped to stabilize the selling but a negative outside week pattern (12/4/15) and failure to break above mid-s suggest a retest of key support at or the Aug '15 low, 09 uptrend. 55 +/- 1 is initial supply. UBS CIO WM Research 21 March 16 26

27 Microsoft Inc. (MSFT) / /77 Sector Technology Last Sale Price $54.66 Rationale: A breakout of a large 13+ year head-and-shoulders bottom pattern above key neckline resistance at (in 13) confirms a Bullish technical outlook. The 21-point technical base breakout renders upside targets to as high as 59-, longer-term. Despite a large gap up in Apr '15 and a subsequent positive outside month, the stock consolidated between the low-s and the low-s. A positive outside week on 10/2/15, a subsequent large gap up breakout on 10/23/15 reaffirm a bullish outlook. More recently, 3/11/16 positive outside week keeps bulls optimistic. Nike Inc. Cl B (NKE) 57.95/ / Sector C. Discretionary Last Sale Price $63.18 Rationale: We keep a technical Bullish view based on: 1) the primary trend starting from 00 lows remains up; 2) a successful breakout above its 09 uptrend channel and 3) continued relative outperformance against SPX. While an overbought condition led to a 19.7% decline in Aug '15, a solid gap up on 9/25/15 and again on 11//15 offset the concerns and led to the extension of its uptrend. However, 12/25/15 and 2/5/16 negative outside weeks and the Feb '16 negative outside month hint of consolidation between mid-s and high-s. Initial support is (Mar '16 low). UBS CIO WM Research 21 March 16 27

28 Occidental Petroleum Corp. (OXY) / Technical rating Bearish Sector Energy Last Sale Price $.66 Rationale: A breakdown from two symmetrical triangles below 90 in Sep/Oct '14 and again below the low-s during the Nov/Dec '14 reaffirms our defensive Bearish technical outlook. A falling wedge pattern has developed over the past 2 years. This pattern hints of a potential medium-term bottom near the bottom of its wedge along The ability to find support here has triggered a technical oversold rally which is now approaching its first major test of key resistance at coinciding with the Feb '16 high, the top of wedge and 38.2% retracement from decline. Priceline (PCLN) Sector Consumer Disc. Last Sale Price $ Rationale: The technical breakout in Oct/Nov '15 at may have been a false breakout/bull trap as a large gap down ( ) on 11/9/15 has led to a 35% decline down to (Feb '16). Likewise, a recent breakdown below (Jan '15 low) may have been a false breakdown/bear trap as an island reversal pattern developed on 2/9/16 coupled with a large gap up on 2/17/16 ( ) has ignited another strong rally. We suspect PCLN will become increasingly volatile this year as it reverts back to its prevailing 2-year trading range between and UBS CIO WM Research 21 March 16 28

29 Pepsico Inc. (PEP) / /116 Sector Cons Staples Last Sale Price $ Rationale: A surge above during Apr '13 confirms a multi-year breakout and renders upside targets to as highs as , longer-term. On a medium term basis, the 34.32% rally from Feb '14 lows resulted in a record high of (Oct '15) prompting an overbought condition and the current consolidation between low-90s and low-s. Despite the near-term consolidation the favourable risk/reward profile and improving relative strength (vs SPX) suggest new all-time highs. Key supports are (Jan '16 lows) and then (14 breakout and 09 uptrend). Pfizer Inc. (PFE) / Sector Healthcare Last Sale Price $29.34 Rationale: A 10-year downtrend breakout above 19 +/- 1 during 11 (not shown) ignited a major recovery. However, the 09 to present rally stalled near its 61.8% retracement (mid-s) from the decline. Although the Jul '15 positive outside month pattern is constructive, a 22.5% decline from its Jul '15 high has created a potential head/shoulders top pattern. Key neckline support is visible at A decisive breakdown confirms a top and warns of a decline towards the low-to-mid s. Key resistance now lies near the potential left/right shoulder (32-33). UBS CIO WM Research 21 March 16 29

30 Procter & Gamble Co (PG) / Sector Cons. Staples Last Sale Price $82.75 Rationale: We have recently upgraded the technical view to Bullish due to recent favourable developments this year. The failure to follow through with a breakout above the top of major uptrend channel (not shown) in the low-90s (Dec '14) led to of a sharp downturn (-.75%) falling to a low of during Aug '15. However, the stock found key support near the bottom of the 11/12 uptrend channel and the 61.8% retracement from its rally near A positive outside month (Jan '16), positive outside week (3/4/16) and the golden cross buy reaffirms a recovery. Philip Morris International (PM) / Sector Cons Staples Last Sale Price $98.90 Rationale: This Consumer Staples has emerged from its 3-year consolidation as evident by the Oct '15 breakout of its 13 downtrend (86). A subsequent successful test of its breakout and -wk ma during Jan '16 correction to the mid- s has led to new all-time high (99.33) during Mar '16. Although higher prices are likely on an intermediate-to-longer term basis, an overbought condition is developing into the recent rally. We would not be surprise to see a near-term high level consolidation develop on repeated failures to surpass. Key supports move up to and then UBS CIO WM Research 21 March 16

31 Red Hat (RHT) /101 Sector Technology Last Sale Price $72.74 Rationale: We remain cautiously optimistic on this software and services name on an intermediate-to-longer term technical perspective. The primary uptrend remains intact as long as RHT retains its key support along corresponding to the extension of its 15 triangle breakout and the Feb '16 lows. However, the sharp decline of nearly 29.5% over the past 6-weeks as sell as a weekly death cross sell signal during Feb '16 and repeated failures to clear above the mid-s warn of a medium term consolidation between the low-to-mid-s and the mid-to-high s. Starbucks Corp. (SBUX) /-71 Sector C. Discretionary Last Sale Price $59.55 Rationale: We retain a cautiously Bullish technical outlook on SBUX due to its favorable primary uptrend dating back to 08/09 lows. Nonetheless, the negative outside week during 2/5/16 as well as the 17.77% correction from its Oct '15 highs (64) hint of a slowing or maturing trend. The ability of SBUX to maintain above key support near the low-tomid-s coupled with a continued bullish relative strength trend (vs SPX) will likely contain a deeper correction. To generate new all-time highs (64) it has to clear above key resistance at (Feb '16 high Oct '15 downtrend). UBS CIO WM Research 21 March 16 31

32 Schlumberger Ltd (SLB) / Sector Energy Last Sale Price $74.54 Rationale: WTI Crude Oil has fallen 75.82% from its 14 highs and SLB has declined % during similar timeframe. A deeply oversold condition coupled with the ability to find key support near the bottom of its falling wedge at 59.6 (Jan '16) has triggered a sharp oversold rally that is now approaching key resistance at (top of wedge, top of Jul '14 wedge, -wk ma, -mo ma and the Jan '15 lows). Trading above this confirms a breakout and renders next upside targets to (38.2% retracement from decline, Nov '15 highs and prior breakdown). Southern Co. (SO) / / Sector Utilities Last Sale Price $.82 Rationale: The recent broad market weakness has helped many defensive stocks including such as Electric Utilities outperform SPX. SO has been progressing higher over the past year as evident by a breakout above key resistance at and recently above.24. This action coupled with a surge above its Jan '15 all-time high of would negate a potential head/shoulders top pattern and would reaffirm a bullish higher high pattern with next upside to On the downside, the 10-wk/-wk moving averages at 48.5 and 46 will likely provide key supports on pullbacks. UBS CIO WM Research 21 March 16 32

33 AT&T Inc. (T) Support Levels / Thermo Fisher Scientific (TMO) Sector Comm. Services Last Sale Price $39.12 Rationale: A 3-year downtrend channel breakout above 36 signals the start of a sustainable intermediate term rally. In addition, the close proximity to its 10-wk ma (36.7) and the -wk ma (34.5) offers key near-to-medium term support on pullbacks. This recent breakout above the mid-s renders an upside target to 39 and then above this to the low- s over an intermediate term time horizon. A moderately overbought condition may develop into this rally thereby setting into motion another consolidation towards the mid-to-high providing another attractive risk/reward situation / Sector Healthcare Last Sale Price $ Rationale: This leadership Healthcare Life Sciences Tools and Services name continues to outperform many of its peers and SPX Index as evident by the 439% rally from its 08 bottom (26.65). The recent rally over the past few months is now encountering near-term resistance at A breakout here can trigger the next rally towards the upper 1s (near-term) and possibly to 1/ (medium-term). Given the strong rally initial trading support moves up to (10-wk/-wk ma and Nov '14 breakout) and secondary support to 117- (15/16 lows). UBS CIO WM Research 21 March 16 33

34 Texas Instruments Incorporated (TXN) / / Sector Technology Last Sale Price $56. Rationale: We retain a Bullish technical rating on TXN. The 13 surge above or its 07 highs and the neckline resistance of a large 02 head/shoulders bottom pattern confirmed a major breakout rendering upside to mid-s and possibly to low-s, over time. However, an overbought condition near in 15 coupled with a weekly death cross sell signal later in the year triggered a 27.5% decline. Nonetheless, strong relative strength (vs SPX) and ability to find support key support near the mid-s now suggests a retest of the Mar '15 highs (59.99). Initial support is United Parcel Service (UPS) 99-/ / / Technical rating Bearish Sector Industrials Last Sale Price $ Rationale: Although this Air Freight name has recovered from its strong selling in recent weeks a large 2-year head/shoulders top pattern, a monthly death cross sell signal and violation of its 09 uptrend channel in the mid-tohigh 90s still warn of an intermediate term top. This breakdown renders a downside target to or the 38.2% retracement from rally and the 06 highs. Below this can trigger a deeper setback to and then to or the % retracement and 12 breakout. Key initial resistance remains at the left/right shoulders at UBS CIO WM Research 21 March 16 34

35 United Technologies Corp (UTX) / Sector Industrials Last Sale Price $98.84 Rationale: We retain a Neutral technical stance on this Aerospace and Defence name as the failure to clear above the top of its 1999/08/14 uptrend channel (not shown) last year at -125 warns of a correction. A gap down on 7/21/15 and a weekly death cross sell signal further confirm a Neutral trend. Nonetheless, the long-term trend still remains positive as long as it maintain above the low-to-mid s (81-84). A positive outside week on 2/5/16 and a convincing move above key initial resistance at -101 (Oct/Nov '15 highs and the 15 downtrend) confirm a recovery. Visa Inc Cl A (V) 65-67/ / / Sector Technology Last Sale Price $73.14 Rationale: The longer-term primary trend starting from lows continues to trend higher and the relative strength trend in relationship to SPX remains positive. However, this trend may be maturing as evident by the failure to clear above key resistance near the low-s. In addition, 12/11/15 negative outside week, Jan '16 gap down and a recent weekly death cross sell signal hint of a consolidation to initial support at (Apr/Jun/Sep '15 lows). A breakdown here suggests downside risks towards its 11 uptrend near the low-s. The mid-to-high s provides key initial resistance. UBS CIO WM Research 21 March 16 35

36 VF Corp (VFC) Source: FactSet, UBS, and Thomson Reuters as of 17 March Sector C. Discretionary Last Sale Price $66. Rationale: The broad selloff in many of the Retail names has also led to a sharp % decline in VFC over the past year. Although selling subsided near or near its Oct '13 gap up and the pivotal 38.2% retracement from the rally we are concerned that technical damages incurred may lead to either a consolidation phase or yet another sell-off. A convincing surge above key initial resistance at would help to confirm a recovery to the lowto-mid-s or to the recent 15 all-time highs. On the downside, key initial is evident at -61 and low-to-mid s. VMware Inc (VMW) / Technical rating Bearish Sector Technology Last Sale Price $51.53 Rationale: We maintain a technical Bearish stance on VMW based primarily on a fan formation breakdown and a complex head-and-shoulders top pattern. Also, negative outside week patterns on 8/7/15, 8/21/15 and 10/9/15, subsequent negative outside month patterns during Aug/Oct '15, multiple gap downs in Oct '15 (10/12/15, 10/21/15 and 1/27/16), and a breakdown below the Jun/Jul '13 pivotal lows along the mid-s imply very strong selling pressure. Nonetheless, the ability to find support in the low-s can trigger an oversold technical rally to the mid-to-high s. UBS CIO WM Research 21 March 16 36