Technical Review of Stocks

Transcription

1 CIO Wealth Management Research 2 February 15 Peter Lee, Chief Technical Analyst peter.lee@ubs.com , 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. This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 29. 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 AAPL APPLE 4 ABBV ABBVIE INC 4 ABT ABBOTT LABORATORIES 5 ACN ACCENTURE 5 ADSK AUTODESK 6 AET AETNA INC 6 AMAT APPLIED MATERIALS INC 7 AMP AMERIPRISE FINANCIAL INC 7 APC ANADARKO PETROLEUM CORP 8 AXP AMERICAN EXPRESS 8 BA BOEING 9 CE CELANESE CORP 9 CL COLGATE-PALMOLIVE CO 10 CMCSA COMCAST CORP 10 CNC CENTENE 11 CSCO CISCO SYSTEMS INC 11 EMC EMC CORP/MA 12 ESRX EXPRESS SCRIPTS HOLDING CO 12 GE GENERAL ELECTRIC CO 13 GOOGL GOOGLE INC 13 INTC INTEL CORP 14 IVZ INVESCO 14 JPM JPMORGAN CHASE & CO 15 KRFT KRAFT FOODS GROUP INC 15 LRCX LAM RESEARCH CORP 16 M MACY'S INC 16 MAR MARRIOTT 17 MDLZ MONDELEZ INTERNATIONAL INC 17 MDT MEDTRONIC INC 18 MET METLIFE 18 MRK MERCK & CO 19 MSFT MICROSOFT INC 19 NKE NIKE INC QCOM QUALCOMM INC SBAC SBA COMMUNICATIONS 21 SBUX STARBUCKS 21 SLB SCHLUMBERGER LTD 22 SNDK SANDISK CORP 22 SO SOUTHERN CO 23 TXN TEXAS INSTRUMENTS INC 23 UNP UNION PACIFIC CORP 24 UTX UNITED TECHNOLOGIES CORP 24 VMW VMWARE INC UBS CIO WM Research 2 February 15 2

3 Changes since last report Additions Name Deletions Emerson Electric Ticker EMR Technical Rating Changes Name Ticker Old New Accenture PLC ACN Neutral Bullish Cisco Systems Inc. CSCO Neutral Bullish SanDisk Corp. SNDK Bullish Neutral Southern Company SO Neutral Bullish United Parcel Service (UPS) will be reviewed in the next edition of - Broader List. The last update on these stocks was published on 29 December 14. Going forward, our previously published rating for these stocks should not be relied upon. UBS CIO WM Research 2 February 15 3

4 Apple Inc (AAPL) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology / / Last Sale Price $118. Rationale: AAPL has negated its sharp decline (.38%) via a convincing move above its Sep 12/14 highs (.72/103.74). This breakout to new all-time highs coupled with the breakout above the extension of its 09 uptrend (88) and above the top of a 1-plus year uptrend channel suggest next upside targets to /1 (near term), , intermediate term and then to , longer term. Initial support moves up to or the 1/28/15 gap up. Secondary support also rises to (-wk ma and Dec '14/Jan '15 lows) and then 101/95. AbbVie Inc (ABBV) Jan '13 Mar '13 May '13 Jul '13 Sep '13 Nov '13 Jan '14 Mar '14 May '14 Jul '14 Sep '14 Nov '14 Jan '15 Source: FactSet, UBS CIO WMR as of 29 January Sector Healthcare Last Sale Price $63.12 Rationale: Recent breakout above or the top of its 13 uptrend channel during Oct '14 suggests higher prices. Since the height of this channel (between 51 and 61-62) is 10-points this suggests targets to the low-to-mid s, nearto-medium term and then to the low-s, longer term. However, an overbought condition developed into the low-s. This development coupled with a negative outside week on 12/12/14 and an island reversal (1/8/15) warns of a correction which has now fallen below its channel breakout (63-64) opening the door for correction to -week ma (.). UBS CIO WM Research 2 February 15 4

5 Abbott Laboratories (ABT) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Health Care Last Sale Price $.26 Rationale: For the past 4 years this Healthcare name has retained its bullish uptrend channel now rising near 39 and 47, respectively. A smaller but equally important uptrend channel is also visible since 11 between 41 and 46. The ability to maintain its -week ma (43) may help to alleviate the recent pullback signalling another test of the top of its uptrend channels near A convincing move above confirms a channel breakout and renders targets to the low-to-mid s. Violation of 43 can trigger a deeper correction to or retesting bottom of its uptrend channel. Accenture PLC (ACN) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology Last Sale Price $85.64 Rationale: An uptrend channel over the past 5-plus years as well as a recent breakout of a 2-year ascending triangle (above the high-s) hints of an outperformance cycle and hence our technical upgrade to Bullish. Targets to the midto-high s are possible, medium term. The 12/19/14 positive outside week pattern suggests key initial support now moves up to or the bottom of the 12/18/14 gap up as well as -week ma. Secondary support lies near low-s or the Dec '14 lows and then mid-s or 14 lows. Initial resistance lies near and then at mid-to-high s. UBS CIO WM Research 2 February 15 5

6 Autodesk (ADSK) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology 53-54/ /81-82 Last Sale Price $.36 Rationale: Despite increased volatility over the near-term, we maintain an intermediate term bullish stance on ADSK as a breakout of a four-year symmetrical triangle pattern last year above 42.5 still renders upside targets to the low-tomid s (medium term), (intermediate term), and (longer term). A positive outside month pattern on Oct '14 suggests pullbacks to the low-to-mid s are technically constructive allowing for better entry points. Secondary support is also available along coinciding with the pivotal reaction lows during Oct '14. Aetna Inc (AET) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Healthcare , Last Sale Price $93.61 Rationale: Trading above the top of a 17+ year internal trend line in the high s during 14 (not shown) renders upside targets to the mid-s (near term), (medium), (intermediate) and (long-term). The 12/19/14 positive outside week is constructive as it helps to establish as key support. The 10-week ma at.5 and the -week ma at 84.5 offer addition support on pullbacks. An overbought condition, failure to breakout above the top of the 12 uptrend channel (96) and a negative outside day on 1/28/15 hint of a near-term consolidation. UBS CIO WM Research 2 February 15 6

7 Applied Materials Inc (AMAT) Source: FactSet, UBS CIO WMR as of 29 January /18.37/ Sector Technology Last Sale Price $23.62 Rationale: This semiconductor manufacturing name has been closely tracking the semiconductor index (SOX) as well as the SPX Index. Despite suffering a dramatic.6% correction during the Jul-Oct '14 downturn we are encouraged by the sharp recovery above its Jul '14 highs (23.46). The ability to maintain key initial support at helps to prolong the 12 rally. In addition, the Nov 12 uptrend channel (21.5) and the -week ma (22.) provide additional support. We expect a trading range to develop between the low-s and the mid-s over the near-to-intermediate term. Ameriprise Financial Inc (AMP) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Financials Last Sale Price $ Rationale: A breakout in Jan 13 above mid s and a subsequent 6-year symmetrical triangle breakout renders upside targets to (intermediate term). However, recent failure to convincingly clear above the top of its 09 uptrend channel (137.33) and a negative outside week on 2/12/14 have led to correction that successfully filled its Oct '14 gap up ( ). The technical developments suggest a short-term trading range is now likely between low s and high 1s. Breakdown below warns of a decline towards / (the Aug/Oct '14 lows). UBS CIO WM Research 2 February 15 7

8 Anadarko Petroleum Corp (APC) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Energy /104.5 Last Sale Price $.14 Rationale: We maintain a neutral stance on APC based primarily on the favorable relative strength of this energy stock as it compares to its peers. However, we would not be surprised to see the stronger Energy names including integrated oils also begin succumb to the broad sell off in WTI Crude/Brent Oil. The 37.% decline from the Aug '13 peak has broken its pivotal Jun '10 uptrend at confirming an intermediate term top and lower prices below On a near-term basis, an oversold condition can lead to a near-term trading range between low-s and mid-s. American Express (AXP) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Financials Last Sale Price $82 Rationale: Despite a trading range trend for the past 1-year this leadership Financial name retains its key support at coinciding with its 10/11 uptrend channel as well as above the extension of its 00/07 trend (not shown). The ability to maintain this support can contain further selling. A large multi-year breakout above its 07 high (not shown ) coupled with a subsequent breakout above the top of its 5 year uptrend channel (67-68) early last year still renders upside targets to (near term), mid-s (medium-term) and (intermediate-term). UBS CIO WM Research 2 February 15 8

9 Boeing (BA) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Industrials Last Sale Price $ Rationale: A breakout of a multi-year technical accumulation pattern above in 13 suggests higher prices are possible, over time. A 79-point technical base breakout renders a target to the mid-1s (near-term), (intermediate term) and then to the mid-1s, longer term. A 1-year consolidation as depicted by a declining trend channel between and has finally been completed on a convincing breakout above 139. This signals the resumption of the primary uptrend. The prior breakout now offers key near term support on pullbacks. Celanese Corp (CE) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Materials Last Sale Price $53.84 Rationale: We maintain a longer term bullish outlook on this cyclical name based on its technical base breakout above the low-s in late-13. The breakout render upside targets to the low-s and then to the low-s (intermediate term) and then to mid-s (longer term). However, we are concerned that the near-to-intermediate term trends have deteriorated in recent months. A head/shoulders top pattern warns of a potential top. The left/right shoulders are near (the Oct '13 high) and (the Dec '14 high). Neckline support is at (the Feb/Oct '14 lows). UBS CIO WM Research 2 February 15 9

10 Colgate Palmolive Co (CL) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Cons. Staples Last Sale Price $69.03 Rationale: Defensive sectors including Healthcare, Utilities and Consumer Staples have been mixed as the result of the strong surge in the US Dollar. This leadership Consumer Staples stock has been more volatile than usual during the correction seen in Jun-Aug '14 as well the current Dec '14 to present correction. The ability to maintain above key support at and a large gap up on 1/29/15 is technically constructive. However, it still needs to surge convincingly above its key initial resistance at to signal the resumption of its primary uptrend channel. Comcast Corp. Cl A (CMCSA) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Cons. Disc Last Sale Price $53.87 Rationale: Wide dispersions remain within the Consumer Discretionary sector. Although CMCSA has completed a 12- year accumulation pattern breakout in 12/13 above the low-s/low-s, it has been erratic since 14 as it has struggled to follow through to new highs. Two recent negative outside weeks on 1/2/15 and on 1//15 warn of a correction back to key support near the high-s to low-s coinciding with previous breakout and 14 lows. The 10/-week moving averages (/56.5) have flattened and the numerous crossovers suggest increased volatility. UBS CIO WM Research 2 February 15 10

11 Centene (CNC) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Healthcare Last Sale Price $ Rationale: We maintain our technical bullish rating on CNC and on the Healthcare sector. This stock has outperformed SPX by over 8.5% this year. A multi-year technical base breakout above in 11, above.98 during mid-13 and recently above the mid-s in Nov '14 still suggest high prices, intermediate-to-longer term. Favorable moving averages, confirmed breakouts, positive outside months during Apr '14/Oct '14 and superior relative performance of the stock versus S&P 0 further reaffirms our bullish outlook. Initial support moves up -105 or 10-week ma and then Cisco Systems Inc (CSCO) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology Last Sale Price $27.22 Rationale: A Fan formation breakout via 3 downtrends during late-11, early-13 and in late-14 is technically significant as this confirms a major trend reversal favoring a sustainable intermediate term recovery. This breakout forces a technical upgrade and suggests a rally to or the Jan '04 highs and then to The 07 high at is also achievable on an intermediate term perspective. On a near-term basis, a slightly overbought condition can lead to a pullback to the key initial support along the recent breakout (26) as well as the -week ma before resumption of uptrend. UBS CIO WM Research 2 February 15 11

12 EMC Corp (EMC) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology Last Sale Price $26. Rationale: A symmetrical triangle breakout in Mar '14 at and a gap up breakout during 7/21/14 reaffirms the start of a sustainable intermediate term recovery. The 10-point technical base breakout renders upside targets to near-term), (intermediate) and (longer term). The recent rally to 31 in Dec '14 basically achieved its near term target prompting a consolidation phase. However, the 10/24/14, 12/19/14 positive outside weeks keep bulls optimistic. Key initial support is at 26 corresponding to the Jun/Oct '14 lows, Apr '13 uptrend and the -month ma. Express Scripts Holding Co (ESRX) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector HealthCare +/ / Last Sale Price $82.28 Rationale: The sharp selloff earlier last year in momentum stocks temporarily hurt ESRX. However, a solid rally from Oct '14 lows not only led to a recovery of all of its losses in the year, but also resulted in a breakout above Mar '14 highs (79.37). In addition, a positive outside month pattern during Oct '14 bodes well for higher prices. A convincing move above the 5+ year uptrend channel along the high-s can ignite the next major rally. Initial support lies along +/- 1 corresponding to the 11/21/14 gap up, the top of 13 uptrend channel and the Dec '14 low. UBS CIO WM Research 2 February 15 12

13 General Electric Co (GE) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Industrials Last Sale Price $24.08 Rationale: The 00 downtrend breakout above 26.5 during Nov 13 confirmed a major trend reversal. However, on a near-to-intermediate term basis there is formidable resistance at coinciding with the top of the 09 uptrend channel, Jan '14 negative outside month and the 61.8% retracement from decline. Repeated failures to clear convincingly above the high-s, as well as complex rising 2+ year complex head and shoulder pattern, down trending moving averages and relative underperformance against SPX support our neutral technical outlook. Google Inc (GOOGL) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology Last Sale Price $ Rationale: After a strong rally from to a record high of in Feb 14 GOOGL has slowed. A lower high (i.e., July 14 high (595.65) is lower than its Feb 14 high (615.04)) and failure of GOOGL to reassert itself above its 1-year downtrend at warn of range bound trading between and Having said that, GOOGL may be nearing an inflection point as the % decline over the past year has weakened the near term trend. A breakdown below warns of a deeper correction. Trading above 5-5 suggests a retest of UBS CIO WM Research 2 February 15 13

14 Intel Corp (INTC) Source: FactSet, UBS WMR as of 29 January 15 Sector Technology / Last Sale Price $34.21 Rationale: The Semiconductor Index (SOX) has confirmed a multi-year breakout above its respective 04/06/07 highs during Feb '14. INTC has finally caught up to its peers with a key breakout above multi-year resistance along during Jun '14. This breakout confirms a 05 head/shoulders bottom pattern and renders upside to mid-s (longer term). Despite a large gap down during Jan '15 the ability of INTC to maintain its key initial support at and above or the Oct '14 low and prior breakout substantiates our continued intermediate term bullish view. Invesco (IVZ) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Financials Last Sale Price $37.77 Rationale: We keep our technical bullish view on IVZ. The long-term bullish trend starting from 08/09 lows remains intact. With a move above 32. or 07 highs, IVZ not only recovered all of its losses during subprime crisis by early 13, but also completed a multi-year accumulation technical base breakout. A retest of its all-time highs near the low- s is still possible, longer-term. However, the stock could consolidate in the near-term considering converging moving averages, a mild pull back in the relative charts versus S&P 0 and the Dec '14 negative outside month pattern. UBS CIO WM Research 2 February 15 14

15 JPMorgan Chase & Co (JPM) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Financials Last Sale Price $.67 Rationale: In Jan '13 a large symmetrical triangle pattern breakout above the mid-s signals the start of a bull rally. This breakout subsequently led to a rather steep uptrend channel, which soon reversed direction during late-13. In due course, a negative outside month in Jan '14 coupled with downside gaps on 4/11/14 and 5/5/14 prompted a consolidation. The erratic signals from the moving average crossovers now suggest a trading range between the mid-s and the mid-s. Initial support now lies at or near the May '14 low. Below this or the Aug/Sep/Oct '13 lows. Kraft Foods Group (KRFT) Oct '12 Dec '12 Feb '13 Apr '13 Jun '13 Aug '13 Oct '13 Dec '13 Feb '14 Apr '14 Jun '14 Aug '14 Oct '14 Dec '14 Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Cons. Staples / Last Sale Price $66.26 Rationale: We have limited data as this Consumer Staples name has only been trading since Sep 12. Nonetheless, the dominant trend remains favorable. The 7/26/13 negative outside week and the failure to convincing breakout above the high-s have led to a trading range between low-to-mid s and high-s. A gap up on 12/18/14 and a subsequent positive outside week pattern on 12/19/14 signalled the resumption of the primary uptrend. While the stock continues to set new highs, the risk-reward is no longer attractive and we wait for a slight pullback to upgrade. UBS CIO WM Research 2 February 15 15

16 Lam Research Corp (LRCX) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology Last Sale Price $79.87 Rationale: We remain bullish on LRCX primarily due to a breakout above a large basing pattern dating back to 00. A positive outside month on Apr 13, an upside gap breakout in Apr/Jul 13 and favorable relative strengths against SPX and SOX helped this stock complete a 28-point basing pattern (shown above). This recent breakout suggests intermediate targets into the mid-to-high s. Having said that, the stock could consolidate in the near-term considering the Dec '14 negative outside month pattern. Initial support lies at or near the Jan '15 low and -week ma. Macy s Inc (M) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Cons. Disc Last Sale Price $65.36 Rationale: A breakout of a multi-year accumulation pattern above the 07 highs or in mid-13 reaffirms our technical bullish stance. Over the intermediate term, an upside gap on 11/13/13 and positive outside month patterns in Oct 13, Feb '14 and Aug '14 are all bullish conditions. Although 8/15/14 negative outside week led to consolidation, a solid rebound from Oct '14 lows and 11/7/14 positive outside week pattern kept the bulls on course. Initial support is at 58- or near the Dec '14 low and -week moving average. Initial supply is at 68. or the Jan '15 highs. UBS CIO WM Research 2 February 15 16

17 Marriott (MAR) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Consumer Disc / Last Sale Price $77.11 Rationale: We keep our technical bullish rating on MAR based on the 7-plus year accumulation pattern breakout above earlier in 14. The 37 point basing pattern suggests an upside target of the low-to-mid s over the intermediate term. In addition, the Feb/Oct '14 positive outside month patterns, rising key moving averages and favorable relative strength versus S&P 0 Index support our bullish technical views. Having said that, the stock could consolidate in the near-term considering the (potential) Jan '15 negative outside month pattern. Initial support lies at Mondelez International Inc (MDLZ) Source: FactSet, UBS CIO WMR as of 29 January / Technical rating Neutral Sector Cons. Staples Last Sale Price $.74 Rationale: A key breakout in Mar 13 above an 11-year technical base supports our longer-term bullish outlook. However from a near-to-intermediate term perspective this Food and Beverage company shares appears to be overbought and in need of a consolidation. The 19.5% correction during Jul-Oct '14 has led to a temporary breech of its 10- /- wk ma and a minor break of the top of its 09 uptrend channel. A consolidation between the low-lows and the high- can lead to the next rally. Initial support is 32 +/- 0. or the Oct '14 lows is the initial resistance. UBS CIO WM Research 2 February 15 17

18 Medtronic Inc. (MDT) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector HealthCare 68 +/- 1 +/- 1 +/ Last Sale Price $73.01 Rationale: The impending merger/acquisition situation will likely drive the stock price, near term. Nonetheless, we retain a bullish technical view based on its favorable uptrend and relative strength. This Healthcare name has confirmed a major breakout above its 00/06 highs at -62 in Jan/Apr 14. In addition, the negation of the Apr '14 negative outside month as well as positive outside months on Aug and Oct '14, 1/9/15 and 1/23/15 positive outside weeks, relative outperformance of the stock versus S&P 0 favor higher prices over the intermediate-to-longer term perspective. MetLife (MET) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Financials / Last Sale Price $46.87 Rationale: Although the longer-term trend from the 09 lows still remains favorable, the stock continues to struggle over the near-to-intermediate term. This is depicted on the weekly charts by the flat weekly moving averages (10-wk and the -wk moving averages) as well as a rising wedge pattern. The Dec '14 negative outside month pattern and a breakdown below uptrend line (51) triggered a sell-off in Oct '14 and again in Jan '15. Initial support resides in the mid-s or near the Aug/Oct '13 and Oct '14 lows. Trading below confirms a lower low pattern. UBS CIO WM Research 2 February 15 18

19 Merck & Co (MRK) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Healthcare / Last Sale Price $62.09 Rationale: In 13, this Pharmaceutical name broke out of a major 00/07 downtrend (not shown) along the low- s. This action confirms the start of an intermediate term turnaround. However, MRK is facing major resistance near the low-to-mid s or the 07/08 highs and the top of the 11 uptrend channel. The relative chart versus SPX continues to improve. We see some early signs of a sustainable recovery. The ability of the stock to clear above the mid-s can entice traders/investors to retain. Key initial support is evident near 59- and then (Dec '14 lows). Microsoft Inc. (MSFT) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Technology /54.- Last Sale Price $42.01 Rationale: MSFT finally cleared above key neckline resistance at in 13. This action completes a large 13-plus year Head and Shoulders bottom pattern and suggests 21-points or upside targets to as high as 58-59, longer term. Over the near-term, a large gap down on 1/27/15 warns of the start of a trading range environment between the high s to low s and the mid-to-high s, near term. This consolidation phase helps to alleviate an overbought condition and allow for a sustainable recovery back to 49- (medium term) and then to the high-s (longer term). UBS CIO WM Research 2 February 15 19

20 Nike Inc. Cl B (NKE) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector C. Discretionary / / Last Sale Price $94.87 Rationale: We retain a technical bullish stance on NKE based on the breakout above its 09 uptrend channel as well as the positive outside month patterns during Feb '14 and Aug '14. However, the 12/13/13, 3/21/14, 8/1/14 and 01/16/15 negative outside weeks and an overbought condition warn of a consolidation. Nonetheless, a gap up on 9/26/14, a positive outside week formation also during Sep '14 and strong relative outperformance versus the SPX Index support higher prices, over time. Initial support rises to -92 or near the Sep '14 highs and the Jan '15 lows. Qualcomm Inc (QCOM) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Technology Last Sale Price $63.69 Rationale: QCOM has become increasingly volatile as evident by the following mixed technical signals: A gap down on 7/24/14 soon led to a negative outside month pattern by July 14. On the other hand, a positive outside month on Oct '14 hinted of a recovery. However, another gap down on 11/6/14 soon led to the Nov '14 negative outside month. On 12/19/14 a positive outside week developed but a recent large gap down on 1/29/15 warns of renewed selling. The above actions strongly suggest a wide trading range is likely between the mid-to-high s and the low-to-mid s. UBS CIO WM Research 2 February 15

21 SBA Communications (SBAC) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Telecom Last Sale Price $ Rationale: We maintain a technical bullish stance on SBAC as a multi-year breakout above the high-s in mid-12 suggests higher prices. This 57-point technical base suggests a technical target to the high-s, intermediate-term. More recently, 01/23/15 positive outside week pattern reaffirm the bulls are in control of this stock. Also the strong relative strength of this stock as it relates to the S&P 0 index indicates a leadership name. Initial support lies near 107. or near the Jan '15 lows. To the upside, Initial supply is at or near the Nov '14/Jan '15 highs. Starbucks Corp. (SBUX) Source: FactSet, UBS CIO WMR as of 29 January / /- 1 +/ Sector C. Discretionary Last Sale Price $89.05 Rationale: We retain a bullish technical outlook on this consumer discretionary name as supported by its strong price chart as well a superior relative strength chart (versus SPX). A V-type multi-year breakout above the 06 highs in late- 11 at first alerted us to the emergence of a leadership name. Since then this stock has progressed higher until it peaked during late 13. A 1-year triangle pattern (high-s and high-s) is constructive as it alleviated an overbought condition. A recent surge above the low-s in Nov/Dec '14 renders targets to the mid-s and then 98-. UBS CIO WM Research 2 February 15 21

22 Schlumberger Ltd (SLB) Source: FactSet, UBS CIO WMR as of 29 January Technical rating Neutral Sector Energy Last Sale Price $81. Rationale: A 5-year triangle pattern breakout (mid s) and the rally to (Jul '14) appears to have been a false breakout/bull trap. SLB and many energy counterparts quickly reversed directions and plummeted across the board. The 36.34% decline in SLB from its Jul '14 highs has weakened the near-to-intermediate term trend. Deteriorating relative strength (vs SPX) and negative outside weeks on 11/14/14 and 11/28/14 warn of continued volatility. Key initial support is the Jan '15 low at 75.. Violation here warns of the next selloff. Initial supply is (11/28/14 gap down). SanDisk Corp (SNDK) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Technology Last Sale Price $77.47 Rationale: A sharp gap down on 01/12/15 weakened both the absolute and relative charts at least from a near-tointermediate term basis. Convergence of key moving averages, a lower low pattern on the price charts, a break-down below uptrend channel and a large gap down in Jan '15 forces a technical downgrade of SNDK to Neutral. The stock is likely headed lower to initial support at or near the Mar/Apr '14 and Jan '15 lows and possibly to mid-s under strong selling. To the upside, the 01/12/15 gap range or offers key initial resistance. UBS CIO WM Research 2 February 15 22

23 Southern Co. (SO) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Utilities 49 +/ / Last Sale Price $52.79 Rationale: A breakdown below 09 uptrend line (in mid-13 shown above) and the longer-term relative underperformance of the stock to SPX kept us uninspired. Negative outside week patterns on 5/2/14, 7/4/14, 8/1/14, 9/12/14 and 10/31/14 warned of further volatility. However, positive outside week patterns on 11/28/14 and 12/19/14, a golden cross signal, an improvement in relative strength and a breakout above its previous resistance along or the 09 uptrend warrant a technical upgrade of SO to Bullish. Initial support is 49 +/- 0.5 or near the Jan '15 lows. Texas Instruments Incorporated (TXN) Source: FactSet, UBS CIO WMR as of 29 January 15 +/ Sector Technology Last Sale Price $54.67 Rationale: TXN completed a major breakout above or the 07 highs as well as neckline resistance along a large 02 head/shoulders bottom pattern. In addition, the surge above the low-to-mid s solidifies a 4 year symmetrical triangle breakout. The Oct '14 positive outside month pattern as well as improving relative strength against SPX reaffirms the bulls are in control from an intermediate term perspective. Initial support lies at +/- 2 or near the Apr/Jul/Sep '14 highs, Dec '14/Jan '15 lows and - week ma. Initial supply is at 56 or near the Dec '14 high. UBS CIO WM Research 2 February 15 23

24 Union Pacific Corp (UNP) Source: FactSet, UBS CIO WMR as of 29 January 15 Sector Industrials / / Last Sale Price $.09 Rationale: We maintain a technical bullish outlook on UNP as a convincing higher highs pattern keeps investors active in the Transportation name. A positive outside month formation on Aug '14 and Oct '14 keeps investors optimistic. Although an 11/28/14 negative outside week pattern led to some consolidation, the 12/19/14 positive outside week pattern hints us that bulls are very much on course. Initial support lies along 116 coinciding with the 12/18/14, 01/22/15 gap ups. Secondary support lies at 110 +/ - 1 or the Jan '15 low, the Sep '14 high and the 10/23/14 gap up. United Technologies Corp (UTX) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Neutral Sector Industrials /- 3 +/ Last Sale Price $116. Rationale: Although the longer-term trend remains bullish, the July 14 breakdown of 12 uptrend and a death cross technical sell signal suggests a trading range. Nonetheless, the 11/21/14 positive outside week pattern triggered a rally from oversold levels. In addition, improving relative strength versus SPX as well as a golden cross buy signal has prompted a retest of its previous all-time highs at 121 (Apr '14/Jan '15 highs). A convincing move above 121 would merit a technical upgrade. Initial support resides at or near the Aug/Sep '14 highs, Jan '15 low and -wk UBS CIO WM Research 2 February 15 24

25 VMware Inc (VMW) Source: FactSet, UBS CIO WMR as of 29 January 15 Technical rating Bearish Sector Technology / Last Sale Price $76.19 Rationale: We retain our technical bearish outlook on VMW primarily on the following negative developments: a Fan formation breakdown, a complex head and shoulders top breakdown in the low-s, increased volatility via downside gaps during Mar/Apr/Oct 14 and Jan '15 and a negative outside month in Apr '14. Also, recent failure to convincingly clear above the extension of the third fan line near -105 led to a correction. Initial support now lies at or the Feb/Apr '13 lows. Secondary support lies at or the Jun '13 low. Initial supply lies at or the 10-wk ma. UBS CIO WM Research 2 February 15

26 Statement of Risk Stock market returns are difficult to forecast because of fluctuations in the economy, investor psychology, geopolitical conditions and other important variables. Appendix Technical Research Rating Definitions Rating CorrespondingDefinition and criteria Rating Category Bullish Buy Well-defined, reliable uptrend, an increase in the rate of change (or strong momentum) and confirming technical indicators Neutral Hold Trading range trend, a flat rate of change and confirming technical indicators Bearish Sell Negative or weakened trend, momentum and confirming technical indicators N/A Not enough historical data to make an evaluation 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 10. UBS CIO WM Research 2 February 15 26

27 Appendix Term / Abbreviation % +or- Moving Average (DMA) -Week Moving Average Adjusted Relative Strength (ARS) Base Beta Blow off stage to a major rally Breakdown Breakout Broadening Top Formation Channel Death Cross Downtrend Line Description / Definition 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 -week moving average (see below), and then dividing by the -week moving average times. Also known as the -week line or 1-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 weekly (usually Friday closing) prices and dividing by to arrive at the average. Each week, the most recent week s figure is added to the total, and the price level from 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 % weighting to the 1-month relative strength, % to the 3-month, and % 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. 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 shorter-term 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. Fan reversal pattern 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. Fibonacci Retracement Level FSR Gap Golden Cross 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%, %, 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 -day moving average) crossing above its longer-term moving average (such as the 1-day or 0-day moving average). Technicians often interpret this crossing of two moving averages as a bullish technical sign that suggests the market has turned in favour of the security. UBS CIO WM Research 2 February 15 27

28 Appendix Term / Abbreviation Description / Definition Head-and-Shoulders This technical formation is one of the best known of the reversal patterns. There are two types of head-and-shoulders patterns that Pattern 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. Head-and-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 favouring higher prices. The violation of neckline to the downside validates a head-and-shoulders top, reaffirming a bearish reversal of lower prices. Internal Trend Line A single trend line connecting at least several high and low points for a stock (or market) over time. Linear Regression Band Moving Average (m.a.) MRA Neckline Support/Resistance Overbought Oversold Positive/Negative Outside Day Relative Strength RRD Support Top Triangle Patterns 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). 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 headand-shoulders bottom or top pattern. When prices break through this neckline support level and continue falling after forming the right shoulder, it confirms a head-and-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 is a performance comparison between a sector, group, or stock and the S&P 0 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. 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 CIO WM Research 2 February 15 28

29 Appendix Statement of Risk Stock market returns are difficult to forecast because of fluctuations in the economy, investor psychology, geopolitical conditions and other important variables. Analyst certification Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report. Required Disclosures For a complete set of required disclosures relating to the companies that are the subject of this report, please mail a request to UBS CIO Wealth Management Research Business Management, 1285 Avenue of the Americas, th Floor, Avenue of the Americas, New York, NY 19. Disclosures (2 February 15) Abbott Laboratories 1, 4, 5, 6, 7, 9, 10, AbbVie 1, 4, 5, 9, 10, Accenture Plc 6, 7, 9, Aetna Inc. 1, 2, 4, 5, 6, 7, 9, 10, 12, 13; American Express 1, 2, 5, 6, 7, 9, 10, 12, Ameriprise Financial 2, 5, 9, 10, 11, Anadarko Petroleum 1, 3, 4, 5, 6, 7, 9, 10, 12, 13; Apple Inc. 4, 6, 7, 9, 10, Applied Materials Inc. 6, 7, 9, Boeing Co. 1, 6, 7, 9, 11, Celanese Corp. 4, 9, 10, Centene Corp. 9, Cisco Systems Inc. 1, 2, 6, 7, 9, 10, 11, 12, Colgate-Palmolive Co. 1, 6, 7, 9, 12, 13; Comcast Corp. (Cl A) 1, 9, 11, 12, 13; Express Scripts Inc. 1, 6, 7, 9, 12, 13; General Electric Co. 2, 4, 5, 6, 7, 9, 10, 11, 12, Google Inc. 1, 2, 4, 6, 7, 9, 10, 12, 13; Intel Corp. 2, 4, 6, 7, 9, 10, 11, Invesco 2, 3, 4, 5, 6, 7, 9, 10, JPMorgan 1, 2, 4, 5, 6, 7, 9, 10, 12, 13; Kraft Foods Group Inc. 1, 4, 9, 10, LAM Research Corp. 9, Macy's Inc. 9, Marriott International Inc. 6, 7, 9, Medtronic Inc. 2, 4, 9, 10, Merck and Co Inc 1, 2, 4, 6, 7, 9, 10, 11, 12, MetLife 1, 2, 4, 5, 6, 7, 9, 10, 13; Microsoft Corp. 1, 2, 4, 5, 6, 7, 9, 10, 12, Mondelez International 1, 2, 5, 6, 7, 8, 9, 10, 12, Nike Inc. 9, QUALCOMM Inc 2, 3, 6, 7, 9, 10, Sandisk 9, SBA Communications Corp. 9, Schlumberger 6, 7, 9, Southern Company 1, 6, 7, 9, 12, 13; Starbucks Corp. 4, 9, 10, Texas Instruments Inc. 6, 7, 9, Union Pacific 6, 7, 9, United Technologies Corp. 6, 7, 9, 11, VMware, Inc 6, 7, 9, 1. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided. 2. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided. 3. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company's common equity securities as of last month's end (or the prior month's end if this report is dated less than 10 days after the most recent month's end). 4. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided. 5. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. 6. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non-investment banking securities-related services are being, or have been, provided. 7. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services other than investment banking services from this company. 8. UBS is acting as exclusive financial adviser to Mondelez International, Inc. on its announced acquisition of a majority stake in Kinh Do Corporation. 9. UBS Securities LLC makes a market in the securities and/or ADRs of this company. 10. Within the past 12 months, UBS Securities LLC has received compensation for products and services other than investment banking services from this company/entity. 11. The equity analyst covering this company, a member of his or her team, or one of their household members has a long common stock position in this company. 12. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. 13. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months. UBS CIO WM Research 2 February 15 29