Technical Review of Stocks

Transcription

1 Update 1 March 2017 CIO Wealth Management Research 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 Praveen Dodda, an employee of Cognizant Group, for his assistance in preparing this research report. Cognizant staff provides research support services to UBS. ab This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 32. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2 Table of Contents Ticker Name Page Ticker Name Page AAPL APPLE 4 KO COCA-COLA CO 16 ABBV ABBVIE INC 4 MCD MCDONALD'S CORP 17 ABT ABBOTT LABORATORIES 5 MDLZ MONDELEZ INTERNATIONAL INC 17 ACN ACCENTURE 5 MDT MEDTRONIC INC 18 AMGN AMGEN INC 6 MMM 3M CO 18 AMZN AMAZON.COM INC 6 MO ALTRIA GROUP INC 19 BA BOEING 7 MRK MERCK & CO 19 BAC BANK OF AMERICA 7 MSFT MICROSOFT INC 20 BMY BRISTOL-MYERS SQUIBB CO 8 NKE NIKE INC 20 BRK.B BERKSHIRE HATHAWAY - CLASS B 8 OXY OCCIDENTAL PETROLEUM CORP 21 CELG CELGENE CORP 9 PEP PEPSICO INC 21 CPB CAMPBELL SOUP CO 9 PFE PFIZER INC 22 CSCO CISCO SYSTEMS INC 10 PG PROCTER & GAMBLE CO 22 CVS CVS CAREMARK CORP 10 PM PHILIP MORRIS INTERNATIONAL 23 CVX CHEVRON CORP 11 SBUX STARBUCKS 23 DIS THE WALT DISNEY COMPANY 11 SLB SCHLUMBERGER LTD 24 FB FACEBOOK INC 12 T AT&T INC 24 GE GENERAL ELECTRIC CO 12 TXN TEXAS INSTRUMENTS INC 25 GOOGL ALPHABET INC 13 UPS UNITED PARCEL SERVICE 25 HD HOME DEPOT INC 13 UTX UNITED TECHNOLOGIES CORP 26 HON HONEYWELL INTERNATIONAL INC 14 V VISA INC-CLASS A 26 IBM INTL BUSINESS MACHINES CORP 14 VZ VERIZON COMMUNICATIONS INC 27 INTC INTEL CORP 15 WFC WELLS FARGO AND CO 27 JNJ JOHNSON & JOHNSON 15 XOM EXXON MOBIL CORP 28 JPM JPMORGAN CHASE & CO 16 The last update on these stocks was published on 1 February Going forward, our previously published rating for these stocks should not be relied upon. UBS CIO WM Research 1 March

3 Changes since last report Additions Ticker Name Technical Rating Changes Name Ticker Old New Deletions Ticker Name UBS CIO WM Research 1 March

4 Apple Inc (AAPL) / / / / / Sector Technology Last Sale Price $ Rationale: This leading technology successfully rebounded from its key support in May '16 (89.47) coinciding with the extension of its 2011/12 triangle breakout (89-90) and the 61.82% retracement (85.37) from its rally. A subsequent falling wedge breakout above triggered a recovery that is now challenging its 2015 all-time high (134.54). A convincing move above renders next upside to (near-term), / (mediumterm) and (long-term). Key initial support is /126.5 (May'15 high and 10-wk ma) and then 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 '16 Apr '16 Jul '16 Oct '16 Jan '17 Price 10-Week Moving Average 30-Week Moving Average / / / Sector Healthcare Last Sale Price $62.09 Rationale: We retain a Neutral technical stance on ABBV as the result of the 2013 uptrend channel breakout (Aug '15), 2015 rising wedge breakdown (Sep '16) and a weekly death cross sell signal (Oct '16). Although the sharp 36.52% decline may have found support at (Oct '15), the ensuing rally has now encountered formidable resistance at coinciding with the extension of the 2013/Oct '15 uptrends. A 1-year head/shoulders top pattern also warns of further volatility. A breakout above can lead to a retest of its 2014/2015 record highs ( ). 30 UBS CIO WM Research 1 March

5 Abbott Laboratories (ABT) / / / / Sector Health Care Last Sale Price $45.68 Rationale: After falling 30.42% from 2015 to 2016 a technical base has developed between (bottom of its 1- year triangle pattern) and (top of the triangle, Aug '15 gap down and 2016 highs). This technical base is necessary to alleviate an overbought condition and to repair the technical damages incurred during the recent bear decline. The ability to breakout above can extend the rally to key intermediate term resistance along and above (top of 2011 uptrend and Jul '15 all-time high). Violation of warns of downside risks to the low-30s. Accenture PLC (ACN) / Sector Technology Last Sale Price $ Rationale: ACN has progressed in a steady uptrend recording a series of higher-highs during Oct'15 (109.86), Jun '16 (.78), Sep '16 (124.96) and Dec '16 (125.72). However, failure to clear convincingly above coupled with a large gap down on 12/21/16 at has led to a consolidation. Nonetheless, the ensuing 10.7% correction has found key support near prompting the recent Feb '17 rally to retest its 2016 all-time high (125.72). A breakout can extend rally to the top of its 2012/2013 uptrend channel at Key support is / UBS CIO WM Research 1 March

6 Amgen Inc. (AMGN) /1-144/ Sector HealthCare Last Sale Price $ Rationale: This Biotech name remains confined to a trading range over the past 2-years between the low-to-mid 130s and the high-1s to low-1s. The gap ups during 11/9/16, 12/13/16, 1/4/17, 1/6/17 and 2/3/17 are technically constructive and hints of a technical base. However, AMGN needs to clear above (2015/2016 highs) to confirm a major breakout. A breakout renders upside targets to the low-190s and then the low-200s. The 2/3/17 gap up at and 10-wk/30-wk ma at is key initial support. Secondary support is (Jan '17 gap up). Amazon.com Inc. (AMZN) / / / / / Sector C. Discretionary Last Sale Price $ Rationale: We retain a Bullish technical outlook on this leadership name and evident by the acceleration of the uptrend over the past 2 years. However, the 79% rally over the past year has now stalled near its all-time highs at A negative outside week on 10/28/16 as well as a large gap down on 10/28/16 hint of a normal consolidation back to its key initial support at coinciding with the May '16 breakout, Nov '16 uptrend, 38.2% retracement from the Nov '16 rally and the 30-wk ma. A positive outside week (01/06/17) bodes well for resumption of uptrend. UBS CIO WM Research 1 March

7 Boeing (BA) /159-1/ Sector Industrials Last Sale Price $ Rationale: This Industrials name continues to trend higher as evidence by strong relative strength (vs SPX) and price momentum (MACD Indicator) breakouts. These technical breakouts are further confirmed by BA recording new all-time highs above its Feb '15 high (158.83). This breakout renders next technical targets to (near-term), (medium-term) and (long-term). Key initial support moves up to (10-wk ma) and then (Feb'17 breakout). Major support remains at (Nov '15 high, 30-wk ma, and 2016 uptrend) and then Bank of America Corp (BAC) / Sector Financials Last Sale Price $24.23 Rationale: The Financials and BAC have quickly recovered from its Jul '15 to Feb '16 setback (-.5%) by easily surpassing its 2015 high (18.48) and 2010 high (19.86) via a gap up breakout on Nov '16 ( ). Although higher prices into the mid-to-high 20s are possible an overbought condition is likely to develop into this sharp rally. Failure to clear above the extension of the 2012/2013 uptrend channel ( ) hints of a near-term consolidation to initial support at (10-wk ma/jan'17 low). A breakout above mid-20s renders upside targets to and UBS CIO WM Research 1 March

8 Bristol-Myers Squibb Co (BMY) /46-46/5/ / Sector HealthCare Last Sale Price $56.44 Rationale: A negative outside week (7/29/16) followed by a large gap down (8/5/16) first warned of a top. This setup triggered a sharp 36.42% decline as numerous key supports including the 10-wk/30-wk ma (56/58), 10-mo/30-mo ma (61.74/61.67) and the 2012/2013 uptrends (63/65) were broken. A bearish negative outside year in 2016 coupled with a negative outside month (Jan '16) and a 3-plus year head/shoulders top warn further volatility. A deeply oversold condition at (50% retracement from its rally) may trigger a technical rally to and then Berkshire Hathaway Inc. Class B stock (BRK.B) / Sector Financials Last Sale Price $1.22 Rationale: The 1-year correction (-19.22%) from its Dec '14 high (152.94) ended via Mar '16 technical breakout above corresponding to the Oct/Nov '15 highs, the % retracement from its decline and the pivotal Dec '14 downtrend. The recent breakout to new all-time highs suggest next upside to (near-term), (medium) and then to (long-term). Given the extent of the recent rally, a minor pullback is possible near term to initial support along the (10-wk ma) and below this to (30-wk ma/feb '16 uptrend). UBS CIO WM Research 1 March

9 Celgene Corp. (CELG) / / / / / / Sector HealthCare Last Sale Price $ Rationale: Biotechnology sector (BTK) and CELG appear to establishing technical bottoms via the respective Feb '16 lows (2,575.58/92.98). A subsequent move above the Oct '15 downtrend (112) and Aug '16 highs (118) via 11/9/16 gap up breakout reaffirm a medium-term bottom via a higher-low/higher-high pattern. Key resistances are: (Jan '17 highs) and (Nov '16 highs). A breakout here confirms the resumption of the primary uptrend suggesting a retest of 1.72 (Jul '15 high). Initial support is (Dec '16 low/30-wk ma) and below this to Campbell Soup Co. (CPB) / / / Sector Cons. Staples Last Sale Price $59.11 Rationale: The 22.42% decline from Jul '16 high (67.89) appears to have found a bottom near coinciding with the prior 2015 breakout, 2012 uptrend and the 38.2% retracement (51.36) from its rally. A large gap up breakout on 11/22/16 above hints of a recovery to However, the rally from its Nov'16 low has stalled at or just below the 76.4% retracement (64.28) from its 2016 decline. A flat relative strength trend (vs SPX) and a flat MACD trend suggest a trading range developing between (30-wk ma) and the mid-s, near-term. UBS CIO WM Research 1 March

10 Cisco Systems Inc (CSCO) Sector Technology Last Sale Price $34.32 Rationale: A recent surge above confirms a technical breakout and renders next upside targets to (nearterm), (medium- term) and then to (long-term). The rally from the breakout is now challenging key supply along the top of the 2012 uptrend channel at An overbought condition and failure to clear above its 2012 uptrend may trigger a near term consolidation to initial support at and below this to (Feb '17 technical breakout and the 10-wk/30-wk ma). On the upside a breakout above the mid-30s renders technical targets to mid-to-high s. CVS Caremark Corp. (CVS) / / / /107 Sector Cons. Staples Last Sale Price $81.48 Rationale: We retain a defensive technical stance on this retail pharmacy company as a major top has developed soon after the sharp 39% setback from its May '16 high (106.67). Nonetheless, the ability to find support at (Nov '16) hints of a technical oversold rally. However, this rally has struggled to clear above its key resistance along the mid-s or the extension of the 2011/2012 uptrend as well as the May '16 downtrend and the 30-wk ma. A convincing close above to reaffirm a technical breakout/recovery. Violation of warns of a retest of its Dec'16 lows (69.3). UBS CIO WM Research 1 March

11 Chevron Corp (CVX) Sector Energy / Last Sale Price $ Rationale: The ability to find key support at (Aug '15) and a higher-low pattern at (Jan'16) solidified a major bottom. However, the late-2016 surge above key intermediate-term resistance along the 61.8% retracement (110.07) renders next upside targets to 119- (76.4% retracement from decline and the extension of the 2008 uptrend) and above this to (medium), and (longer-term). A moderately overbought condition has developed and failure to surpass 119- warns of a correction to (Oct '16 breakout) and below this to The Walt Disney Co (DIS) / / Sector Cons. Disc. Last Sale Price $ Rationale: A negative outside month (Aug '15) and gap downs and negative outside weeks during 2015/2016 first warned of an intermediate-term top. After violating the bottom of its 2011 uptrend channel (below 98) DIS achieved its downside target of 86.2 (38.2% retracement from the rally). A higher-low on Oct '16 (93.21) as well as a subsequent falling wedge breakout above (Oct '16) and a weekly golden cross buy signal has led to an oversold rally which is testing its key resistance at Failure to breakout may trigger another pullback to UBS CIO WM Research 1 March

12 Facebook Inc. (FB) Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 Jul '15 Jan '16 Jul '16 Jan ' / / Sector Technology Last Sale Price $ Rationale: An ascending triangle breakout during Jul '13 above the low-to-mid 30s led to a steeper uptrend channel as defined by and A breakout above the top of this 3-year uptrend channel renders technical targets to and above this to The recent correction to or the extension of its 2014 channel and a positive outside week (01/06/2017) as well as a gap up (01/13/17) can lead to a retest the top of its uptrend channel at The 10-wk and 30-wk ma at and 126, respectively offer key near-term support on pullbacks. General Electric Co (GE) / / /35-36/ Sector Industrials Last Sale Price $30.19 Rationale: The 7-plus year uptrend channel remains intact as defined by and After finding support near and a positive outside month (Nov '16) have led to another rally back to retest the top of its channel. However, the rally has stalled at prompting the recent 9.6% correction. On the downside, key support remains visible along coinciding with the Oct/Nov '16 lows, and the bottom of its channel. A flat relative strength trend (vs SPX) and a flat MACD trend warn of a near-to-medium term trading range scenario between the high-20s and the low-30s. 16 UBS CIO WM Research 1 March

13 Alphabet Inc (GOOGL) / / / / Sector Technology Last Sale Price $ Rationale: This leadership new Technology name retains its rising uptrend channel over the past 3-plus years. Although higher prices are likely, over time an overbought condition as well as a flat-to-sideways relative strength/macd trends hint of a near-term consolidation. Nonetheless, a breakout above 867 can trigger a rally toward (nearterm), (medium-term) and (longer-term). The 10-wk ma (832) and 30-wk ma (9) provide key initial support. The bottom of its uptrend channel at 755 as well as its Nov/Dec '16 lows remains medium-term support. Home Depot (HD) / / Sector C. Discretionary Last Sale Price $ Rationale: The recent breakout above the top of its 1-year uptrend channel between and still support the basis for higher prices to We suspect the rally from 2008 low (+758%) is strikingly similar to the prior rally (+757%) suggesting a likely overshooting of upside targets once again. The top of its 2011/2012 uptrend channel is at suggesting key resistance. Failure to breakout here may set the stage for the next consolidation. Initial support is (10-wk ma and Feb '17 channel breakout) and then to (30-wk ma). UBS CIO WM Research 1 March

14 Honeywell International Inc. (HON) / / / / Sector Industrials Last Sale Price $ Rationale: An ascending triangle breakout on Feb '16 above renders upside targets to 119- (achieved) and then to (extension of 2012 channel). A large gap down on 7/22/16 has triggered a minor correction to key initial support at (Aug'15 uptrend and 30-mo ma). The ability to find support here coupled with a positive outside day on 11/09/2016 has triggered another rally to crucial initial resistance at A convincing close above this supply may extend the rally to and then to Initial support is (Jul '16 high/10-wk ma). International Business Machines Corp (IBM) / / / / Sector Technology Last Sale Price $ Rationale: A 3-plus year downtrend channel breakout above 165 is technically significant as this signals the start of a medium-term recovery. The rally from the breakout has met its initial target of (the 61.8% retracement from its decline, Oct '14 gap down and May '15 high). Although higher prices to 192.5/ (76.4% retracement /Apr'14 highs) and then to 211/ ( highs) are possible, over time a consolidation is probably in order. Violation initial support at may trigger a correction to (Feb '16 uptrend and 30-wk ma). UBS CIO WM Research 1 March

15 Intel Corp (INTC) / /51.46 Sector Technology Last Sale Price $36.53 Rationale: A 12-year head-and-shoulders bottom breakout (29.5) on Jun '14 still renders upside to the mid-to-high s. However, the recent strong rally has briefly stalled near coinciding with the Oct '16 highs. Also note the negative outside week (10/14/16) and negative outside month (Oct '16) warn of a near-term consolidation. This action helps to alleviate an overbought condition and sets into motion a breakout above 38.4 triggering the next rally to the mid-to-high s. Initial support is (Aug '15 uptrend and Oct/Nov '16 lows) and then (Jul '16 lows). Johnson and Johnson (JNJ) / / / / Sector Healthcare Last Sale Price $ Rationale: A multi-year channel breakout above the mid-s during 2013 signaled the start of an outperformance cycle. This leadership Healthcare name has quickly exceeded a number of intermediate-term technical targets including the low-110s and the low-to-mid s. During the recent correction, JNJ has found key support at 109 prompting the recent rally to the low-s. A breakout here may trigger a retest of its all-time highs of established on Jul '16. On the downside, initial support moves up or the extension of Jul '16 downtrend and the 10-wk/30-wk ma. UBS CIO WM Research 1 March

16 JPMorgan Chase & Co (JPM) / Sector Financials Last Sale Price $90.33 Rationale: This leading Financials name has reversed back above the extension of its 2012/2013 uptrend in the high s. This technical action has further strengthened the intermediate-to-long term trend outlook. Next key resistance is evident near the mid-to-high 90s and above this to the low-s. However, a moderately overbought condition warns of a near-term consolidation. Initial support is at (10-wk ma and Jan'17 high) and below this to low-s (extension of the 2013 uptrend). Violation here warns of a decline to (30-wk ma and the Dec '16 gap up). Coca Cola Co (KO) / Sector Cons Staples Last Sale Price $41.78 Rationale: This Consumer Staples has once again failed to breakout above the top of its uptrend channel at 46.01(Jun'16 high). A weak relative strength (vs SPX) and a negative outside week (07/29/16) have triggered a decline to initial support at (Mar'15/ Aug'14 lows). The ability to find support here may trigger an oversold rally to (50% retracement from its Apr-Dec'16 decline and above to (Apr/Jul'16 highs). However, violation of (Aug'14 low) warns of the start of a deeper correction to the bottom of its trading range at UBS CIO WM Research 1 March

17 McDonald s Corp (MCD) 123.9/ / / Sector C. Discretionary Last Sale Price $ Rationale: During the recent correction MCD held onto key support at or the extension of its uptrend and the 50% retracement (109.73) from its rally. This promptly led to an oversold rally which now challenges key resistances at 128. (Jul '16 high) and (May'16 high). A breakout here renders is bullish as this renders next upside targets to However, failure to clear above this supply may lead to a consolidation to initial support at 124 (10-wk ma) and below this to (Dec'16 low/30-wk ma). Violation here warns of a deeper decline to Mondelez International Inc (MDLZ) / Sector Cons. Staples Last Sale Price $45.38 Rationale: A major base breakout in Mar 13 above (not shown) confirms a long-term Bullish trend. Since then MDLZ has followed a steady uptrend recording new all-time highs during Jul '14 (39.54) and again during Aug '15 (48.58).A breakout above (Jul '16 high) signals the resumption of its uptrend and next target to the high-s. However, negative outside weeks (11/11/16 and 02/17/17) also warns of downside risks to 39.21(Mar '16 low) and below this to 37 (extension of its 2014 breakout). Key supports:.5-41 (Dec'16 low) and the mid-30s (Feb '16 low). UBS CIO WM Research 1 March

18 Medtronic Inc. (MDT) 79.31/ / Sector HealthCare Last Sale Price $81.03 Rationale: The recent 1-plus year base technical breakout above 78.5 (Apr '16) still renders upside targets to (near-term) and then to (medium-term). However, after breaking out at (11/04/16) the rally abruptly reversed direction near as evidenced by an island reversal (11/11/16). This led to the violation of key support at.71 (Oct'16 low) thereby accelerating the correction to The ability to find support along the extension of 2013 uptrend hint of a recovery to 81.66/85.01 ( % retracement from decline and Nov'16 high). 3M Co (MMM) / / Sector Industrials Last Sale Price $ Rationale: This Industrials leader remains in a steady uptrend setting record highs during Mar'15(1.5) and again on Aug'16 (182.27). Soon after recording all-time highs, an overbought condition and a negative outside week on 10/28/16 warn of a near-term correction. The primary uptrend can continue as long as stock maintains above its key initial support at or the prior 2016 breakout. Recent surge above confirms a technical breakout and renders next upside targets to (near-term) and above this to 215 (medium-term). Key initial support is UBS CIO WM Research 1 March

19 Altria Group Inc. (MO) /.82 56/ / Sector Cons Staples Last Sale Price $74.43 Rationale: Since 2009, MO has progressed in a steady uptrend recording new highs during Feb'15 (56.69) and again during July'16 (.15). After failing to clear above the top of its 2012 uptrend channel at.15, a 13% correction met its downside target in the low-s (Oct'16). This prompted an oversold rally which is now challenging resistance at (extension of its 2015 uptrend). The ability to breakout can extend the rally to the high-s (top of its 2013/2015 channel) and to mid-s. Key support is.15 (Jul'16 high) and below this to (10-wk and 30-wk ma). Merck & Co (MRK) 64-65/62-65/ Sector Healthcare Last Sale Price $66.16 Rationale: Breakout from the 1-plus year downtrend channel and a close above the 61.82% retracement from its 2015 decline at coupled with a recent surge above hint of the resumption of the primary uptrend. A positive outside week during 01/06/17 prompted an oversold rally to its initial resistance at (Nov'16 high price). The breakout from this supply zone suggests upside targets to the mid-s and then to low-to-mid s, intermediateterm. Key support is near 64(Aug'16 high) and below this to (10-wk ma and 30-wk ma) and UBS CIO WM Research 1 March

20 Microsoft Inc. (MSFT) / / Sector Technology Last Sale Price $64.62 Rationale: MSFT continues to trend higher on the backdrop of strong relative strength (vs SPX) and favorable price momentum (MACD indicator). The strong relative strength is a reflection of the technical breakout above its Jan/Aug '16 highs at The uptrend can continue as long as the stock maintains above its key initial support at 58.. Recent surge above solidifies its technical breakout and renders next upside targets to the low-to-mid s (nearterm) and above this to the low-s (medium-term). Key initial support is (Jan'17 low/10-wk ma) and.38. Nike Inc. Cl B (NKE) 54.09/ / / Sector C. Discretionary Last Sale Price $57.86 Rationale: The Sep-Oct'16 correction led to violation of the bottom of its 2012 uptrend channel. A triangle pattern breakdown along the low-50s during Oct'16 and a potential head/shoulders top pattern warns of further downside risks to high-s (the bottom of its downward channel (48-49). A moderately oversold condition and the ability to hold 49.01(Nov'16 low) has triggered a technical rally to (Aug'15 high) and above this could extend the rally to.33. Failing to cross this supply zone can lead to a pullback to (10-wk ma and Jan'17 high) and UBS CIO WM Research 1 March

21 Occidental Petroleum Corp. (OXY) / / Sector Energy Last Sale Price $64.89 Rationale: A 2-year falling wedge pattern breakout above during mid-apr '16 hints of a medium-term recovery. However, weak relative strength (vs SPX) and against energy peers warn of underperformance. OXY has struggled to close above its 50% retracement (79.78) from the decline. The 18% decline from its Sep'16 high (78.48) and the rolling over the 10-wk /30-wk ma warns of a major top. Failing to maintain support at could extend the decline to (Jan'16 low). The ability to find support here can lead to a technical base between low-s to low-s. Pepsico Inc. (PEP) / / / / Sector Cons Staples Last Sale Price $ Rationale: A surge above during Apr '13 confirms a multi-year breakout and renders upside targets to , over time. However, on a medium term basis, the 18.97% rally from its Jan '16 lows has created a moderately overbought condition suggesting a consolidation before the resumption of uptrend toward After violating the bottom of its 2016 uptrend channel a successful test of the high-90s (the bottom of the 2011/2012 uptrend) has triggered a rally to Jul'16 high. Short term support is (10-wk and 30-wk ma) and below this to UBS CIO WM Research 1 March

22 Pfizer Inc. (PFE) / / / Sector Healthcare Last Sale Price $34.26 Rationale: A negative outside week (8/5/16) coupled with a weekly death crossover (10/14/2016) led to a 4 month 20% correction till (11/04/16). This prompted an oversold rally which is now approaching (61.82% and 78.6% retracement from its Aug-Nov'16 decline). After achieving the mid-30s target a consolidation can lead to a pullback to (10-wk ma and 30-wk ma) and below this to (Oct'16 low). However, a breakout above (Aug'16 high) signals the resumption of its primary uptrend and renders next upside target to low-to-mid s. Procter & Gamble Co (PG) 90.3/ / Sector Cons. Staples Last Sale Price $91.05 Rationale: During the recent correction key support was found near (38.2% retracement (.59) from its rally). This prompted an oversold rally which now challenges resistance at (Dec'14 high). A breakout here reaffirms the primary uptrend and renders next upside targets to and above this to However, failure to clear resistance of may trigger a near-term consolidation to initial support is at 90.33(Oct'16 high) and below to (10-wk ma/30-wk ma). Secondary supports moves up to 83.24(Jan'17 low) and then to (Dec'16 low). UBS CIO WM Research 1 March

23 Philip Morris International (PM).58/ Sector Cons Staples Last Sale Price $ Rationale: A 6-month head/shoulders top pattern and a weekly death crossover sell signal on 09/30/16 led to a violation of initial support of or Jul'16 low. The ability to find support at the 61.82% retracement of rally (86.32) coupled with positive outside week during 01/20/17 prompted the technical rally to the mid-s. The Feb'17 breakout at signals the resumption of its uptrend and renders targets to and then to , over time. However, a moderately overbought condition may trigger pullback to initial support at.58 (Aug '16 high). Starbucks Corp. (SBUX) 55.7/ / / /-71 Sector C. Discretionary Last Sale Price $57.48 Rationale: The longer-term trend remains favorable as long as SBUX retains its primary uptrend channel dating back to 2008/2009 bottom ( ).However, a negative outside month (Apr '16) coupled with a failure to surpass the top of its 1-year downtrend channel (59-) warn of a consolidation to the mid-50s and below this to low-50s. A breakdown below the low-50s warns of a trend reversal favoring lower prices. A convincing move above helps to reaffirm a sustainable rally to the mid-to-high s (medium-term) and possibly to the low-s (longer-term). UBS CIO WM Research 1 March

24 Schlumberger Ltd (SLB) / /110 Sector Energy Last Sale Price $.15 Rationale: A negative outside week on 5/8/15 coupled with a weekly death cross sell signal during Aug'15 led to a sharp correction. An oversold condition and a successful test of the bottom of its falling wedge at 59.6 (Jan '16) signal a recovery. A subsequent falling wedge breakout at prompted a rally to 87 (Jul'15 high). This resistance zone coincides with the extension of the uptrend. A breakout here can extend the rally to the mid-to-high 90s. However, violation of key support near (Sep/Nov'16 lows) warns of selling to the mid-s. AT&T Inc. (T) Support Levels.24/ / / Sector Comm. Services Last Sale Price $42.36 Rationale: This Telecommunication services name has corrected sharply after violating its prior 3-plus year breakout in the high-30s. The decline from 43.89(Jul'16 high) has found support near the 61.82% retracement (35.91) from the rally and the extension of the 2013 downtrend channel breakout (35-36) and prompted an oversold rally back above the top of its 3-plus year channel. A breakout from this supply zone (39.72-) suggests rally till (Jul'16 high) and to high-s. Failure to clear this supply suggests near-term consolidation within high-30s to mid-s. UBS CIO WM Research 1 March

25 Texas Instruments Incorporated (TXN) Sector Technology Last Sale Price $77.24 Rationale: This technology name continues to trend higher retaining its strong relative strength readings (vs SPX) and favorable price momentum (MACD Indicator).The relative strength has strengthened as a result of the recent technical breakout above Mar/Oct '15 highs at 59-. This breakout here reaffirms new highs and renders next upside technical targets to the high-s (near term) and to low-90s (medium term). Key initial supports moves up to coinciding with the Jan'17 low or 30-wk ma. Secondary support is visible near (Sep'16, Nov'16 low). United Parcel Service (UPS) / /118.4/ Sector Industrials Last Sale Price $ Rationale: A negative outside week (12/16/16) coupled with a gap down on 1/31/2017 has pressured the stock to decline below 10-wk ma (116). The ability to find support near the mid-s (50% retracement (103.87) from its Jan- Dec'16 rally) may contain the selling. Violation here opens the door for a decline to mid-90s and below this to Jan'16 lows (87.30) or bottom of its uptrend channel. However, a moderately oversold condition may prompt a relief rally to (Jul'16 high/10-wk ma). A medium term trading range is likely to develop between and UBS CIO WM Research 1 March

26 United Technologies Corp (UTX) / Sector Industrials Last Sale Price $ Rationale: Although the longer-term still remains favourable, the intermediate-term technical outlook has weakened due to the 2009 uptrend breakdown at during Jul '15. The recent rally from the low-s is now challenging key resistance of , which coincides with the extension of the 2012 uptrend as well as the 76.4% retracement (114.76) from the decline. A surge above this supply zone can help to strengthen the recovery to the and above this back to the Feb'15 record highs at Key initial support is and to Visa Inc Cl A (V) 83-84/ / / Sector Technology Last Sale Price $88.43 Rationale: After a 1-year consolidation this technology name has finally broken out above its (Nov '16 high) coupled with a weekly golden cross buy signal reaffirms continuation of uptrend towards or to the top of its uptrend channel. A breakout here further renders next upside targets to as high as (extension of 2012/2014 uptrend), over time. Initial supports moves up to as high as 83.3 and then to (10-wk and 30-wk ma). Failure to clear above the extension of Jan '14 uptrend (96-98) hints of a near-term consolidation to initial support near Nov '16 high (83.96). UBS CIO WM Research 1 March

27 Verizon Communications Inc. (VZ) Source: FactSet, UBS as of 24 February / / / Sector Comm. Services Last Sale Price $50. Rationale: A multi-year breakout above 2007 highs (43.01) in late-2012 renders an upside target to over the longer term. An island reversal (7/5/16), weekly death cross sell signal (Sep'16) and violation of (Apr and May'16 lows) led to a 19.2% decline that found key support at (Feb'15 lows and the extension of downward sloping channel breakout). The above action prompted an oversold rally which failed to sustain above Apr'16 highs led to 12.8% correction from Ability to hold support of may prompt a relief rally back to 55. Wells Fargo & Co (WFC) 56.31/ Sector Financials Last Sale Price $57.81 Rationale: The Feb'17 technical breakout (above 58.77) signals rally to the mid-to-high s or to challenge the extension of the bottom of its uptrend channel. The relative strength (vs SPX) has been improving as a result of the recent technical breakout above Jul'15 highs. The longer-term trend will turn favorable once WFC enters into its uptrend channel dating back to Failure to clear above this channel may trigger a near-term consolidation to 56.31(10-wk ma) and below this to 53.34(Jan'17 low). Key resistance is at and above this towards UBS CIO WM Research 1 March

28 Exxon Mobil Corp (XOM) / / Sector Energy Last Sale Price $81.08 Rationale: The recovery from Mar '16 breakout has stalled near or the 76.4% retracement from its rally and the 2007/2008 highs prompting a pullback to low-s or to the bottom of the Aug'15 uptrend. The ability to find support here can ignite the next rally back to mid-to high-90s (Jan'17, Jul'16, Nov'14 highs). A breakout above is technically important as this signals the resumption of its primary uptrend. However, failing to hold support at low-s warns of a correction to low-s (Jan'16 lows or to 76.4% retracement (73.4) from its rally). UBS CIO WM Research 1 March

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

30 Appendix Broadening Top Formation Channel Death Cross Downtrend Line Fan reversal pattern Fibonacci Retracement Level FSR Gap Golden Cross Head-and-Shoulders Pattern Internal Trend Line Linear Regression Band 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 shorterterm moving average falling below its longer-term moving average. Technicians often see this as a bearish technical sign indicating the market has turned negative on the security. A trend line connecting successively lower peaks for a stock (or market). Its technical significance is determined by the same factors governing an uptrend line. The fan formation is a technical pattern that is based on the use of multiple trend lines to denote a major trend reversal. The fan pattern gets its name as it basically resembles a fan. It should have a minimum of three trend lines (uptrends or downtrends). The break out/break down of the third downtrend/uptrend often completes the fan pattern and signals the start of a major trend reversal. The starting point of these trend lines should come from a significant peak or a significant trough. A technical analysis term used to describe potential areas of support (price stops declining) or resistance (price stops rising) on the charts. After a strong rally or decline there is a tendency for a security to retrace a certain portion of its prior move (up or down). Fibonacci retracements use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before continuing in the original direction. These levels are computed by taking the two extreme points and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and %. Forecast Stock Return is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. An open space in a chart created when a stock (or market) opens either higher than its highest level attained during the prior session (referred to as a gap up or an upside chart gap) or lower than its lowest level reached during the prior day (called a gap down or a downside chart gap). Some gaps are caused by events and should be ignored: ex-dividend gaps, new share issues, and expiration of futures contracts. A crossover on the chart that involves a security s shorter-term moving average (such as the 50-day moving average) crossing above its longer-term moving average (such as the 150-day or 200-day moving average). Technicians often interpret this crossing of two moving averages as a bullish technical sign that suggests the market has turned in favor of the security. This technical formation is one of the best known of the reversal patterns. There are two types of head-and-shoulders patterns that often appear on the charts H/S top and H/S bottom. Both of these patterns often denote the process of a reversal either from a bullish or bearish trend. Headand-shoulders formation often is comprised of a left shoulder, a head, and a right shoulder, and a line drawn across its shoulders defines its neckline. The breaking of the neckline to the upside confirms a head-and-shoulders bottom breakout, which signals the start of a bullish reversal favoring higher prices. The violation of neckline to the downside validates a head-and-shoulders top, reaffirming a bearish reversal of lower prices. A single trend line connecting at least several high and low points for a stock (or market) over time. A common statistical technique often used by investors/traders to better forecast values by utilizing the least squares fit method to plot a trend line. A linear regression band consists of upper and lower bands. These bands are calculated by computing the number of standard deviations above or below of the regression line. UBS CIO WM Research 1 March

31 Appendix Moving Average (m.a.) MRA Neckline Support/Resistance Overbought Oversold Positive/Negative Outside Day 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 head-and-shoulders bottom or top pattern. When prices break through this neckline support level and continue falling after forming the right shoulder, it confirms a headand-shoulders top formation. Conversely, neckline resistance is a trend line drawn across the tops of the left shoulder, the head and the right shoulder. When prices break above this neckline resistance level and keep on rising, it typically completes the head-and-shoulders bottom pattern. A technical condition in which the price of a security has risen to such a degree that the price becomes overvalued or has reached the upper band of its trading range resulting in a potential pullback in price. Opposite of Overbought. A technical condition that occurs when the price of a security has fallen to such a degree that the price becomes undervalued or has reached the lower band of its trading range prompting a potential rally. When one day s range (high and low) exceeds the prior day s range, and the stock (or market) in question closes near its daily peak, this is referred to as a positive outside day. A negative outside day would be recorded if the stock (or index) finished near its daily low after having a wider range than the prior session. The same rule can be applied on a weekly and monthly basis as well. Relative Strength Relative strength is a performance comparison between a sector, group, or stock and the S&P 500 Index over a specified time frame. Our time frame is often a one-, three-, and six-month basis but does vary according to investment orientation. RRD Support Top Triangle Patterns Rating/Return Divergence is automatically appended to the rating when stock price movement has caused the prevailing rating to differ from that which would be assigned according to the rating system and will be removed when there is no longer a divergence, either through market movement or analyst intervention. An area where increased buying interest is likely to develop during a decline. These points, which can take several forms (minor, major, etc.), often provide downside protection for an issue in a primary uptrend, but only temporary relief to an issue in a primary uptrend, during which time many support levels are often broken. A chart pattern marking a period of distribution following an uptrend. The larger the top, the greater the downside potential following its completion. It, too, can take many forms. There are three different types of Triangle patterns Symmetrical, Descending and Ascending. Symmetrical Triangle is considered to be a continuation pattern that often signals a period of consolidation in a trend followed by a resumption of the prior trend. It is formed by the convergence of a descending trend and an ascending trend. An Ascending Triangle is a bullish pattern, which is denoted by two trend lines a flat trend line and an ascending uptrend line. A Descending Triangle is a bearish pattern. It is the opposite of the Ascending Triangle in that there is a flat trend line and a downward sloping downtrend line. UBS CIO WM Research 1 March