CIO Wealth Management Research 15 December 14 Broader list Peter Lee, Chief Technical Analyst peter.lee@ubs.com +1-212-713-8888, 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 42. 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.
Table of Contents Ticker Name Page Ticker Name Page AMGN AMGEN INC 4 IBM INTL BUSINESS MACHINES CORP 21 AMZN AMAZON.COM INC 4 ITW ILLINOIS TOOL WORKS INC 22 APA APACHE 5 JNJ JOHNSON & JOHNSON 22 AZN ASTRAZENECA PLC 5 KMB KIMBERLY-CLARK CORP 23 BAC BANK OF AMERICA CORP 6 KO COCA-COLA CO 23 BEN FRANKLIN RESOURCES INC 6 LB L BRANDS INC 24 BMY BRISTOL-MYERS SQUIBB CO 7 MCD MCDONALD'S CORP 24 BP BP PLC 7 MHFI MCGRAW HILL FINANCIAL BRK.B BERKSHIRE HATHAWAY - CLASS B 8 MMM 3M CO C CITIGROUP INC 8 MO ALTRIA GROUP INC 26 CAT CATERPILLAR INC 9 NEE NEXTERA ENERGY INC 26 CELG CELGENE CORP 9 NSRGY NESTLE SA/AG 27 COP CONOCOPHILLIPS 10 NVS NOVARTIS AG 27 COST COSTCOWHOLESALE CORP 10 ORCL ORACLE CORP 28 CPB CAMPBELL SOUP CO 11 OXY OCCIDENTAL PETROLEUM CORP 28 CSX CSX CORP 11 PEP PEPSICO INC 29 CTL CENTURYLINK INC 12 PFE PFIZER INC 29 CVS CVS CAREMARK CORP 12 PG PROCTER & GAMBLE CO CVX CHEVRON CORP 13 PM PHILIP MORRIS INTERNATIONAL D DOMINION RESOURCES INC 13 RDSA ROYAL DUTCH SHELL PLC 31 DD DU PONT (EI) DE NOMOURS 14 STJ ST JUDE MEDICAL INC 31 DE DEERE AND CO 14 T AT&T INC 32 DEO DIAGEO PLC 15 TEVA TEVA PHARMACEUTICALS 32 DIS THE WALT DISNEY COMPANY 15 TGT TARGET CORP 33 DOW DOW CHEMICAL 16 TOT TOTAL SA 33 DUK DUKE ENERGY CORP 16 TRV TRAVELERS 34 EOG EOG RESOURCES INC. 17 USB U.S. BANCORP 34 F FORD MOTOR CO 17 V VISA INC-CLASS A FB FACEBOOK INC 18 VOD VODAFONE GROUP PLC GILD GILEAD SCIENCES INC 18 VZ VERIZON COMMUNICATIONS INC 36 GIS GENERAL MILLS INC 19 WAG WALGREENS CO 36 GSK GLAXOSMITHKLINE PLC 19 WFC WELLS FARGO 37 HAL HALLIBURTON WMT WAL-MART STORES INC 37 HD HOME DEPOT INC XOM EXXON MOBIL CORP 38 HON HONEYWELL INTERNATIONAL INC 21 UBS CIO WM Research 15 December 14 2
Changes since last report Additions Name Ticker Technical Rating Changes Name Ticker Old New Apache Corp. APA Neutral Bearish BP PLC BP Neutral Bearish International Business Machines IBM Neutral Bearish Kimberly-Clark Corp KMB Neutral Bullish Occidental Petroleum OXY Neutral Bearish Target TGT Neutral Bullish Total TOT Neutral Bearish Wal-Mart WMT Neutral Bullish The last update on these stocks was published on 17 November 14. Going forward, our previously published ratings for these stocks should not be relied upon. UBS CIO WM Research 15 December 14 3
Amgen Inc. (AMGN) 1 1 1 1 1 1 1 1 Sector HealthCare 156-158 148.47-151.47 144.46-1 172-175 191-194 0-2 Last Sale Price $164.53 Rationale: The strong rally of the Biotech sector has driven many of the Biotech names including AMGN to fresh new highs. In the process AMGN has achieved a number of technical projections including the mid-1s (00-13 channel breakout target) and the low-to-mid 1s (13 channel breakout target). Trading above the top of its wedge at 172-175 negates the wedge pattern and confirms a flat/pennant breakout rendering next upside to 191-194 and then to 0-2. An overbought condition coupled with failure at 172-175 can lead to a pullback to the low-to-mid 1s. Amazon.com Inc. (AMZN) 0 3 0 3 0 2 0 2 0 1 0 1 284-287.5 9-2 246-249 3-349 3.5-3 379-383 Sector C. Discretionary Last Sale Price $7.32 Rationale: The ability to retain its longer term support at the 08 uptrend (now rising at 293), the May/Oct '14 lows (284-285) and the % retracement from 11-14 rally (287.5) prevented a deeper correction. However, AMZN continues to struggle to clear above its key resistance along the Jan '14 downtrend (3-3) as well as the 38.2-% retracement (331.53-346.09) from Jan-Mar/Oct '14 decline. On the downside, violation of key support at 284-287.5 forces a technical downgrade as next support is 9-2 or the 61.8% retracement and then May 13 low at 2.75. UBS CIO WM Research 15 December 14 4
Apache Corp (APA) 1 1 110 1 1 110 Technical rating Bearish Sector Energy 56.5 51.03 41.05 61-63 69-71.5 75-78 Last Sale Price $56.44 Rationale: We recommend downgrading the technical outlook of APA to Bearish as it appears a structural breakdown has been confirmed as the result of the Oct '14 violation of the pivotal 1999 uptrend at 75, the recent break of Apr '13 lows (67.91) and the violation of the 61.8% retracement (61.72) from 1999 to 08 rally. Although APA is trading at deeply oversold levels a break of 56.5 can trigger the next downturn to 51.03 or the Mar '09 reaction low and below this to the 76.4% retracement (41.05). Initial supply is now visible along the low-s and then the high-s to low-s. AstraZeneca PLC ADS (AZN) 85 75 85 75 Sector HealthCare 66.5-67. 61.79-63.5 53.5-56 76-77 81.19-82.68 86-87 Last Sale Price $71. Rationale: AZN has completed a 4-year technical base breakout on a surge above 52.5-53.5 in late-13. This breakout ignited a major rally that achieved several of our technical targets including 66-67 or the Oct '06 record high and 76-77 or the technical target based on late-13 breakout above 53.53. The May '14 rally to the low-s also met longer term resistance associated with the extension of the 1998/06 trend line (not shown). The recent consolidation towards the mid-to-high s may set the stage for the next move to 76-77 and above this supply signals the next rally. UBS CIO WM Research 15 December 14 5
Bank of America Corp (BAC) 18 16 14 12 10 8 6 18 16 14 12 10 8 6 4 Sector Financials 16.73 15.43-16.2 14.37-14.84 18.03-18. 19.10-19.86 21.16-22.6 Last Sale Price $17.13 Rationale: BAC is close to confirming a near-term technical breakout above its Mar '14 highs of 18.03. A recent positive outside week pattern during 12/5/14 hints of an impending breakout. A breakout here can ignite a rally towards the top of its 11 uptrend channel near the low-s or near the 38.2% retracement (22.) of 06-09 decline. Failure to decisively clear above 18.03 can also lead to another consolidation to initial support at 16.73 or the Dec '14 low and below this to key secondary support at 15.43-16.2 or the bottom of the 11 uptrend and the -week ma. Franklin Resources Inc. (BEN) 4 Sector Financials 52-52.5 48-49 44-58.5-59.5 64-/68-69 79-81 Last Sale Price $53.96 Rationale: The intermediate-to-longer term trend remains bullish as evident by a major 5-year uptrend channel (49- and 64-) as well as a large 6-year triangle breakout in early 13 at. However, a negative outside month during Jan '14 (58.87) and 12/12/14 negative outside week warn of a correction back to its trading range between 49- and 58.5-59. The recent successful test of the Sep 13 gap up at 48.72-49.31 is constructive. However, a breakout above 58.5-59.5 is still needed to confirm the next rally to 64- (near term), 68-69 (medium) and then 79-81 (long-term). UBS CIO WM Research 15 December 14 6
Bristol-Myers Squibb Co (BMY) Sector HealthCare 56.83-57.49 51-52 46.-47. -61 67-69 74.88/79. Last Sale Price $58.75 Rationale: Pharmaceutical Index (DRG) has appreciated 156% and BMY has gained 282.5% from their 08/09 bottoms. A 4-plus year uptrend channel breakout above 39 in 13 has exceeded its technical target of 47-48. In fact, it has also surpassed its 61.8% retracement (52.38) from its 1999-08 declines and is now challenging its 76.4% retracement (.98). A positive outside month pattern during Oct '14 and a flag/pennant breakout above 59- hint of the next rally to 67-69 and possibly to the mid-to-high s, over time. Initial support is 56.83-57.49 and then 51-52. BP PLC ADS (BP) Technical rating Bearish Sector Energy.-36. 33.62 28.79 39.5-.5 42.5-43.5 46.5-48.5 Last Sale Price $36.24 Rationale: WTI Crude Oil has fallen 46.75% and BP has decline 32% from their respective Jun '14 highs. In the process, BP has violated its 10/11 uptrend (44-) confirming a symmetrical triangle breakdown. This breakdown forces a technical downgrade to a Bearish trend and suggests downside risks to as low as 28-29, over time. Near term support resides near its Jun '03/Jun '12 lows at.77-36.. Violation can trigger the next decline to the Mar '09/Oct '11 lows at 33.62-33.7. The Jul '10 low at 26.75 is major support. Key initial resistances are 39.5-.5 and 42.5-43.5. UBS CIO WM Research 15 December 14 7
Berkshire Hathaway Inc. Class B stock (BRK.B) 1 1 1 1 110 1 1 1 1 110 Sector Financials 1-143.5 132-136 121-124 149-151 153-1 162-164 Last Sale Price $146.46 Rationale: BRK.B remains a leader within the Financial sector. Three breakouts above the mid-s (mid-12) as well as above the low-s last year and the recent Aug '14 breakout above 133 or the 1998 internal trend line render upside targets to the high 1s, near-term, 154-1, medium-term and then to 162-164, intermediate-term. Although higher prices are possible an overbought condition coupled with failure to clear above the top of its 11 uptrend channel at 149-151 and a negative outside week on 12/12/14 signals a pullback to 1-143.5 and possibly 132-136. Citigroup Inc. (C) Sector Financials 51-53 47-48.06-.18 54.3-.28 64-73-75 Last Sale Price $53. Rationale: A cup and handle accumulation base is nearing completion. However, a wide trading range still exists between.06 (Jun 13/Apr '14 lows) and 54.3-.28 (09/13/14 highs). A breakout above the mid-s confirms a major breakout and renders upside targets to the mid-s (near-term), mid-s (intermediate) and mid-s (longer-term). Initial support is 51-53 or the Nov/Dec '14 low and the 10- /- week ma. Pivotal support remains near the Jun '13/Apr '13 lows at.06-.18 and then 43.68-.1 or the 38.2-% retracement from 12-14 rally. UBS CIO WM Research 15 December 14 8
Caterpillar Inc. (CAT) 1 110 1 110 Sector Industrials 89-79.5-81.5 67.5-72.5 98-105-107 109.73-111.46 Last Sale Price $. Rationale: A triangle breakout along 87-89 during late-13 followed by a breakout above the 13 high () hint of a technical recovery. However, failure to follow through with these breakouts and the sharp selling over the past few weeks has led a death cross signal. This Industrial name is now testing its crucial 11 uptrend (89-) or the 10/11 uptrends. The ability to find support here may help to stabilize the recent strong selling. However, violation of support here can trigger a decline to the high- to low-s. Key initial resistance is 98- and then near 105-107. Celgene Corp. (CELG) 1 1 Sector HealthCare 105-109 96-98 86-88.5 119-121 128-129 1-136 Last Sale Price $114.49 Rationale: Similar to many Biotechnology names, the CELG rally from 12 to present is very impressive (9.5%). This recent rally has led to another overbought condition that warns of another consolidation possibly of the magnitude of the two prior setbacks including the Jan-Apr '14 correction (-23.5%) and the Sep-Oct '14 downturn (-13.8%). Despite an overbought condition it appears the relative strength remains strong and the ability of CELG to maintain above its 10- /- week ma (105/93.5) can led to higher prices, long-term. Key initial resistance resides along 119-121. UBS CIO WM Research 15 December 14 9
ConocoPhillips (COP) Sector Energy 62.36-62.74 58.5-59.5 56.-58.5 67-69 74.5-75 78-79 Last Sale Price $62. Rationale: A breakout above the low-s in May 13 renders upside targets to the low-s (near term) and then the mid-s (secondary). Both of these targets have been achieved prompting the Jul '14 to present correction. The ability of COP to find key support near the May 13 breakout and the Feb '14 low along 62.36-62.74 is necessary to stabilize the recent strong selling. Nonetheless, we remain concerned about the potential for a large head/shoulders top that has developed over the past year. Neckline support is at 62-63 and the left/right shoulders are visible near 74.5-75. Costco Wholesale Corp. (COST) 1 1 1 1 1 1 Sector Cons. Staples 1-137 131-132 1-127 141-143 152-153 1-162 Last Sale Price $137.88 Rationale: The dominant trend remains the solid 09 uptrend channel bounded by 121-122 on the downside and 141-143 on the upside. As long as this trend continues, we retain our bullish technical view on this Consumer Retail stock. However, the recent sharp rally may be encountering formidable resistance as a negative outside week developed on 12/12/14 near the top of its multi-year range. A moderately overbought condition also suggests a consolidation to initial support at 1-137 or the 10-week ma. Secondary support is near 131-132 or 61.8% retracement from Oct-Dec' 14 rally. UBS CIO WM Research 15 December 14 10
Campbell Soup Co. (CPB) Sector Cons. Staples 41-42 38-39.5 36-37.71-46.67 48.08-48.83 52.5-53.5/56 Last Sale Price $43.75 Rationale: An ascending triangle breakout during 13 above the high-s renders an upside target to 48-49, which was achieved during May 13 (48.83). Another 1-plus year triangle pattern still bodes well for higher prices. A convincing breakout above the May 13 downtrend at 46-47 confirms a breakout rendering next targets to 48.08-48.83 (near term) or the May/Aug '14 highs, the low-s (medium term) and then the mid-to-high s (long term). Key initial support is 41-42 or the Aug/Oct '14 lows and the 38.2% retracement from the 11-13 rally. Major support is 37. CSX Corp. (CSX) 15 15 Sector Industrials 34.29-34. 32.-33. 29.75-31 38-39 41-42 46-47 Last Sale Price $34.84 Rationale: Transport stocks including CSX have recently traded to all-time highs on the backdrop of lower oil prices. A positive outside month (Oct '14) breakout above the top of its 1-plus year uptrend channel at 32.5-33 has quickly achieved its technical price target near the high-s (near term). Although higher prices to the low-to-mid s are possible a gap down on 12/1/14 and a subsequent negative outside day on 12/14/14 warns of a consolidation. Initial support is evident near 34.29-34. or the 10/23/14 gap up and Nov/Dec '14 lows. Secondary support is near the low-s. UBS CIO WM Research 15 December 14 11
CenturyLink Inc. (CTL) 15 15 Sector Comm. Services 37.64-38.79.69 33.75-34. 41.69-41.99 43.43 44.67-46.87 Last Sale Price $37.58 Rationale: The strong and persistent selling from 13 has abated soon after a breakout of the declining channel (at 31) during Feb '14. A subsequent breakout above 32-33 as well as a golden cross weekly buy signal during Apr '14 has extended the recovery phase. Although higher prices are possible, the primary trend remains down as there is formidable resistance along the 08/11 downtrend (not shown) near the 43. The ability to surpass this downtrend confirms a major breakout. Initial support is 37.64-38.74 or Aug/Oct/Nov '14 lows and below this next support is.69. CVS Caremark Corp. (CVS) Sector Cons. Staples 87-88 83.-83.61 79-81 91-92 99-105 Last Sale Price $89.94 Rationale: The channel breakout during late 12/early 13 suggests upside targets to the low-to-mid s. CVS has surpassed this technical target reaching a record high of 92 during Nov' 14. A positive outside month (Oct '14) as well as a subsequent positive outside week (11/7/14) and a recent breakout above top of 11 channel at 87-88 suggests upside targets to 99- and then 105. However, an overbought condition coupled with a negative outside day on 12/12/14 signals a consolidation to initial support at 87-88 or the 10-week ma and below this to 83.-83.61. UBS CIO WM Research 15 December 14 12
Chevron Corp (CVX) 1 1 110 1 1 110 Sector Energy.66-102 95.3-95.73 85-87/81-83 107-110 113-115 118-1 Last Sale Price $102.38 Rationale: Energy names have all suffered intermediate term setbacks during the sharp Oct '14 downturn. Violation of the bottom of its pivotal 11 uptrend channel at 116-117 and a weekly death cross sell signal confirms an intermediate term trend reversal. The recent decline is nearing next key support at.66-102 or the Nov '12 lows and 09 uptrend. Additional support is also visible near the mid-s and then towards the low-to-mid s or the 03 uptrend and 61.8% retracement from 08-14 rally. Initial resistance is 107-110 and 113-115 or 10-week ma and the Jul '14 downtrend. Dominion Resources Inc. (D) 75 75 Sector Utilities -71-67 -61 73.7574.59 77-79 84-85 Last Sale Price $72.72 Rationale: The S&P Utility remains the second best performing major S&P sectors this year gaining % YTD. This is in sharp contrast to the SPX gains of 8.3% YTD. D has also gained 12.9% YTD outperforming SPX but lagging S&P Utility. The recent rally has slowed near the mid-to-high s coinciding with the top of its 09/11 uptrend channel. A daily gap down on 11/11/14 suggests a near term trading range between -71 and 74-75. The larger trading range remains in the mid-s or the Aug/Oct 14 lows and the high-s or the top of the 09/11 broadening top. UBS CIO WM Research 15 December 14 13
E.I. DuPont de Nemours & Co. (DD) 75 75 Sector Materials 68-69 63-64.5 58-73-73.5 75-77.5 84-85 Last Sale Price $69. Rationale: The confirmed May 13 breakout of a triangle pattern (above 54.9) coupled with a 3-year ascending triangle breakout in Jul 13 (above 57-58) still render upside technical targets to 71-73 (near term), 75-77.5 (medium), 84-85 (intermediate) and 93-95 (longer term). The correction into late summer to early fall briefly violated the Nov 13 uptrend. However, the ability to trade back above its 10- /- week ma (68/) and above recent Sep/Oct '14 highs of 72-73 alleviated an overbought condition. A retest of key initial support at 68-69 can solidify the uptrend. Deere and Co (DE) Sector Industrials 78-75-76 69-.5-91.5 94-95.5 99- Last Sale Price $86.41 Rationale: Two triangle patterns dating back to 10 and 12 respectively are converging to a major breakout or breakdown. The ability to find key initial support at 78- during the Sep-Oct '14 correction helps to solidify the intermediate-to-longer term uptrend. However, there remains formidable resistance along the top of the two triangles around 94-95.5. Failure to retain 78- confirms a major technical break down and suggests downside risks to the mid-s and possibly to 69-. Above.5-91.5 can lead to a retest of 94-95.5. A breakout here suggests 99-. UBS CIO WM Research 15 December 14 14
Diageo PLC ADS (DEO) 1 1 110 1 1 110 Sector Cons. Staples 108-110 98.5-102 92.-93.12 123-1 129-131 134.08 Last Sale Price $114.09 Rationale: Although the longer term trend still remains favorable, we have become increasingly concerned about the deterioration of this global consumer staples name over the past two years as evident by a break of a well-defined 1- plus year triangle during the Sep-Oct '14 market downturn. In addition, three negative outside months during Jan '14, Jul '14 and Sep '14 as well as the rolling of 10- /- week ma (121/117) warn of a potential top. Violation of 108-110 confirms top. The ability to find support here can lead to a near term trading range between 108-110 and 123-1. The Walt Disney Co (DIS) 88.5-.5 84.5-86.5 82.47-82.68 94.5 98-99 104-105 Sector Cons. Disc. Last Sale Price $91.49 Rationale: This leading Consumer Discretionary has broken out of a major 15-year technical base (not shown) above 43.26 during early 12. This breakout renders upside to the mid-s which was achieved late last year. Since then a 3+ year uptrend channel has developed as defined by the top of the channel or key resistance (98-99) and the bottom of channel or key support (82-82.5). A breakout above 94.5 suggests next targets to 98-99 and then 104-105. However, a negative outside week on 12/12/14 warns of of a consolidation to the mid-to-high s or near its 10- /- wk ma. UBS CIO WM Research 15 December 14 15
Dow Chemical Co. (DOW) Sector Materials.5-42 36-38 38-.5 47-48 -51-57 Last Sale Price $43. Rationale: Although we are tempted to lower our intermediate term technical outlook, last year's breakout above the top of an ascending triangle pattern at 36-37 is technically significant as this signals the start of a recovery. A subsequent breakout above the 08/11 highs at 42.23-43.43 earlier in the year reaffirms a sustainable turnaround and renders upside targets to -56.75 (Sep 14/Mar 05 highs), 61-63 (intermediate term) and then to 73-75 (longer term). Nonetheless, the sharp Sep-Oct '14 setback warns of a consolidation between the low-s and the low-s. Duke Energy Corp. (DUK) 85 75 85 75 Sector Utilities 77-78.5 74.5-75.5 72 84-85 91-93 98- Last Sale Price $82.69 Rationale: The 5+ year uptrend channel remains intact between 72 and 85.5. The recent technical breakout above the mid-s (74.5-75.5) coinciding with the May '13 and May '14 highs renders upside target to 84-85 (medium term) and then to 91-93 (longer term). DUK has achieved its medium target on 11/5/14 trading to a high of 83. and prompting a recent consolidation to 77-78.5 or the 10-week ma, 38.2-% retracement from Aug-Nov '14 rally and the Aug '14 uptrend. Additional support remains near the prior breakout at 74.5-75.5 and then near the bottom of channel (72). UBS CIO WM Research 15 December 14 16
EOG Resources (EOG) 1 110 1 110 Sector Energy 81.07-83.66 76.15-78 69.5-72.5 92-94 102-104 108-110 Last Sale Price $86.37 Rationale: Similar to many of its Energy peers the sharp sell-off in Energy over the past few months has also impacted this leadership energy name. A number of near to intermediate term supports were breeched including: (1) 103-105 or the Jul '14 lows and the -week ma (103.5); (2) the large gap up on 5/6/14 (99.71-101.84); (3) 94-95 or the 38.2% retracement from 11 to 14 rally. The ability to find key support at -81 has led to a technical oversold rally that has stalled at 103-105. Violation of low-s would confirm a head/shoulders top and downside risks to 69.5-72.5. Ford Motor Co (F) 18 16 18 16 14 12 14 12 10 8 10 8 6 Sector C. Discretionary 14.5-14.75 13.26-13.42 12.10-12.33 15.12-15.69 16.0-16. 17.87-18.23 Last Sale Price $14.99 Rationale: During Oct '13 rally to 18.01, F failed to clear major resistance or the 02/11 highs (18.23-18.97). In the ensuing correction both of the 10-/- week moving averages (14.88/16.17) and its Aug 12 uptrend (15.5) were breached. F has broken its crucial 38.2% retracement (14.) from Jul '12 to Oct '13 rally prompting the recent downturn to 13.26 or to the % retracement (13.42) from 12 to 14 rally. The ability to find support here triggered a technical rally to the -week ma (16.14). A trading range is now likely between 13.26 and 16.13 over the near term. 6 UBS CIO WM Research 15 December 14 17
Facebook Inc. (FB) Jul '12 Oct '12 Jan '13 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 Jul '14 Oct '14 Sector Technology 74-74.5.32-72.5 66-67 79.57-81.27 85-87 91-92 Last Sale Price $77.83 Rationale: After rallying sharply over the past year, FB has slowed soon after experiencing a large gap down on 10/29/14 (76.88-79.57). A subsequent negative outside week (10/31/14) further reaffirms the start of a consolidation. Key initial support is at 74-74.5 or the recent Dec '14 lows. Pivotal secondary support resides near.32-72.5 or the bottom of a large Jul '14 gap up as well as the pivotal Aug 13 uptrend and the Oct/Nov '14 lows. Violation here can trigger a deeper correction to 66-67 and then to 61-62. Trading above 79.57-81.27 signals the resumption of the rally. Gilead Sciences Inc. (GILD) 1 1 Sector HealthCare 98.37-101 96-97 91.73-92.63 109-111 115-117 1-1 Last Sale Price $104.13 Rationale: This Biotechnology name has rallied 83.98% from its recent Apr '14 low (63.5) to its Nov '14 record high (116.83). Although higher prices are possible the recent failure to clear above the top of a Broadening Rising Wedge pattern (115-117) and a 5-month diamond pattern warns of a maturing rally. Nonetheless, the recent Nov '14 correction of -15.8% to 98.37 successfully tested key support along the 38.2% retracement (96.46) from Apr to Oct '14 rally as well as the -week ma (97). Trading below 96-98 confirms breakdown and above 110-111 confirms breakout. UBS CIO WM Research 15 December 14 18
General Mills Inc. (GIS) Sector Cons. Staples -.5 46-47 43-44 53.-53.84.05-.64-61 Last Sale Price $52.10 Rationale: After undergoing a 4-plus year uptrend channel between the high-s and the mid-s, GIS finally broke out above the top of this range during Jan 13. This has ignited a sharp rally to new all-time highs at 53.07 by Aug '13 and then to another record high of.69 by Jun '14. Since then the stock has entered into a trading range between 46-47 or key support and 53.84-.64. Trading above.64 signals the start of the next sustainable rally to the lowto-mid s. On the other hand, trading below 46-47 confirms a head/shoulders top and downside risks to the low-s. GlaxoSmithKline PLC ADS (GSK) Technical rating Bearish Sector HealthCare 41.68-41.91 38.-38.76 34-36.5 47-49 51.5-53.5-56.75 Last Sale Price $42.42 Rationale: GSK continues to diverge against many of its Healthcare peers violating important supports below the bottom of its 13 uptrend channel at 52-53 and recently below the bottom of a major 5-year uptrend channel at 47-49. The Jul/Aug '14 break down reinforced a key intermediate term trend reversal. A decline below its Nov '12 lows near 41.68 confirms a lower low and warns of further downside risks to mid-to high s. An oversold condition has developed into this downturn. However, there is formidable resistance in the mid-to-high s or near the prior breakdown. UBS CIO WM Research 15 December 14 19
Halliburton (HAL) Source: FactSet, UBS CIO WMR as of 28 November 14 Sector Energy.75-37.5 32.82-33.74 29.83 44.37-47.12 51.78-53.69 58 Last Sale Price $37.93 Rationale: A breakout above the high-s early in the year 14 hints of a major breakout. However, the sharp downturn in WTI Crude and Energy sector appear to have negated this major breakout. A 49.6% decline from Jul '14 highs, gap downs (11/17/14 and 11/28/14), death cross sell signal and the relative underperformance of the stock versus S&P 0 warns of strong selling. HAL is now approaching crucial support near the 08 uptrend as well as Apr '13 lows and 76.4% retracement from 12 to 14 rally at.75-37.5. Key initial supply is 44.37-47.12 (11/28/14 gap down). Home Depot (HD) Sector C. Discretionary 94-95 86-88 81.56-83. 99-103-105 1-123 Last Sale Price $99.78 Rationale: An accelerated channel breakout during early 12 above mid-s led to a much steeper 2-year uptrend channel. The violation of the bottom of the uptrend channel in the mid-s during Aug/Sep 13 warned of a top. However, this leading Home Improvement Retailer soon transitioned into a new trading range channel between 72.21-74.61 and 81.56-83.. A recent breakout above the top of the channel at 83.1 renders upside targets to 93-94 (near term), 99- (medium), 103-105 (intermediate) and 1-123 (long-term). Initial support is 93-95 and then 86-88. UBS CIO WM Research 15 December 14
Honeywell International Inc. (HON) Sector Industrials -92 87-89 82.89 98-102-104 113-114 Last Sale Price $95.88 Rationale: A 13-year technical breakout in the low-to-high s during the late-12/early-13 (not shown) suggests higher prices, over time. However, on a near-to-intermediate term basis the strong rally over the past year has slowed near key medium term resistance at 98- or the top of its 11 channel and Jul '14 record high. A convincing breakout here can help to extend the rally to 102-104 and then to 113-114. However, failure to surpass 98- coupled with an overbought condition can trigger a consolidation to key initial support along the low-s to high-s. International Business Machines Corp (IBM) 2 2 0 0 1 1 1 1 1 1 1 1 Technical rating Bearish Sector Technology 1-1 1-105 1-1 195-0 215. Last Sale Price $1.38 Rationale: We recommend downgrading technical outlook to Bearish due to the confirmation of a large Ascending Broadening Top pattern. The violation of the 10 uptrend near the high-1s solidifies an intermediate term top. In addition, a large downside gap on 4/19/13 between 196.5 and 6.15 as well as the 8/1/14 and 10/10/14 negative outside week patterns hint of strong selling pressure. Recently, a gap down on 10//14 also suggests the Bears remain in control. Next support now resides along 1-1 coinciding with the % retracement from 08-13 rally. UBS CIO WM Research 15 December 14 21
Illinois Tool Works Inc. (ITW) 89- +/- 2 76. +/- 2 107-108 115-116 Sector Industrials Last Sale Price $93.31 Rationale: A breakout above 59- during late-12 reaffirms our bullish outlook. In addition, the surge above a 4- plus year rising uptrend channel during Apr/May 13 in the low-s is technically significant as this action can lead to the continuation of the uptrend. More recently, a positive outside month patterns on Aug '14 and Oct '14 should keep the Bulls in control. However, the 12/12/14 negative outside week pattern hints of a consolidation phase is likely before the resumption of uptrend. Initial support is 89- or the Jun/Aug/Sep '14 highs. Initial supply lies at +/- 2 levels. Johnson and Johnson (JNJ) 110 110 +/- 2 95 +/- 1 86.09 107-108 116-118 122-124 Sector Healthcare Last Sale Price $104.43 Rationale: In 13, JNJ has finally broken out of its large multi-year technical base that dates back to the late-19s. This breakout above the low-s and then above the high-s renders an intermediate-term target to 116-118. In addition, constructive relative strength readings against S&P 0 Index favor higher prices, over time. However, the July 14 negative outside month pattern warns of a consolidation. Initial support lies along +/- 2 or near the Jul/Aug '14 lows. Secondary support is also available near 95 +/- 1 or the Jul/Aug/Nov 13 and Jan 14 highs. UBS CIO WM Research 15 December 14 22
Kimberly-Clark Corp. (KMB) 1 1 110 110 109. 98-91.5-93 116-117 1-127 132-133 Sector Cons. Staples Last Sale Price $112.68 Rationale: We recommend maintaining a Bullish technical stance on KMB. The long-term trend starting from 08-09 lows remains in a decisive uptrend. Although a negative outside month pattern on Jul '14 led to a consolidation, a solid rally from Oct '14 lows not only led to the resumption of the primary trend but also led to a (Oct '14) positive outside month pattern. Targets as high as the mid-to-high 1s and the low-1s are possible over time. The relative performance has also improved reinforcing the bullish trend. Initial support is at 109. or the Jul '14 high and then 98-. Coca Cola Co (KO) Source: FactSet, UBS CIO WMR as of October 14 Sector Cons Staples 39.06 36 +/- 1 31.-32. -51 54- Last Sale Price $.91 Rationale: We retain a neutral rating on KO primarily due to its inability to hold onto its 4+ year uptrend channel. This warns of a maturing bull trend. A positive outside month in Oct 13 gives the bulls hope for a recovery. Technically, a convincing move above 44.47 (the Jul 1998 previous all-time highs) and (the Nov '14 high) are needed to confirm a sustainable recovery to the high-s and possibly to the low-s, over time. However, the stock s relative underperformance with respect to SPX and the July/Oct 14 negative outside month patterns hint of continued technical weakness. UBS CIO WM Research 15 December 14 23
L Brands Inc. (LB) 76-77 68. +/- 1.5 +/- 2 85-86 89-92 96 Sector C. Discretionary Last Sale Price $83.39 Rationale: After a solid performance in 13, LB's stock price performance had been volatile during early 14. A 12/6/13 negative outside week pattern led to a % correction. Also an Apr 14 negative outside month pattern tested the conviction of the bulls. Nonetheless, positive outside weeks on 5/9/14 and again on 6/27/14 paved the way for an impressive bounce back. A weekly golden cross buy signal and superior relative performance favor higher prices. To protect gains we recommend raising initial support to as high as 76-77 or the Nov '14 reaction low and the 10-wk ma. McDonald s Corp (MCD) 88 +/- 2 83.31 +/- 1 92-92. 97. 103.78 Sector C. Discretionary Last Sale Price $.62 Rationale: 09 uptrend (dash line) breakdown in 12 triggered a sharp decline to the bottom of its 08 uptrend. The ability to maintain 83.31 during this pullback has led to another technical rally to key near term resistance coinciding with the 13/14 highs at 103.78. However, repeated failures to breakout followed by a violation of 08/09 uptrend (mid-s) warn of a decline to the Oct '14 low (89.34) and then to Jan 13 gap up (86-89). Below this suggests next support at 83.31 or Nov 12 lows/03 uptrend. A move below 83.31 would warrant a technical downgrade. UBS CIO WM Research 15 December 14 24
McGraw Hill Financial Inc. (MHFI) 85 +/- 2 75 +/- 2 +/- 1 93-94 -101 106-107 Sector Financials Last Sale Price $88.52 Rationale: The bullish trend remains intact on MHFI as evident by a confirmed breakout of a 4+ year uptrend channel along high-s late last year. Despite a volatile year and the minor breech of the 1-year uptrend the ability to maintain the low-s or the top of the five year uptrend channel breakout and a subsequent move to new all-time highs support the continuation of the primary bull trend. In addition, the Oct '14 positive outside month signals the next rally. However, we can expect a consolidation over the near-term based on the recent 12/12/14 negative outside week pattern. 3M Co (MMM) 1 1 1 1 1 1 1/ +/- 3 1 +/- 1 1 +/- 1 163-166 174-175 181-182 Sector Industrials Last Sale Price $157.12 Rationale: A classic inverse head and shoulder pattern breakout dating back to 04 (not shown) offers bullish implications, at least from an intermediate-to-longer term perspective. The upward sloping neckline corresponds to 107.- 108.. The right and left shoulder corresponds to the high-s and the low-s, respectively. A breakout during the first quarter of 13 and more recently a positive outside month pattern during Oct '14 reaffirms an accumulation phase. Initial support is near the 10-wk ma (1) and then 1 +/- 3 or near the Jun/Jul/Sep '14 highs and -wk ma. UBS CIO WM Research 15 December 14
Atria Group Inc. (MO) 48.5/44 +/- 0.5 +/- 0.5 33-51-52-56 -62 Sector Cons Staples Last Sale Price $49. Rationale: This defensive consumer staples name is showing recent technical strength despite a rare but well defined broadening wedge formation as denoted by a widening trading range between the high-s and the high s. A breakout above the 12 uptrend (shown above) has triggered a rally towards the top of the wedge. In addition, relative outperformance of the stock in recent months indicates defensive/income money favoring this name. Nonetheless, a 12/12/14 negative outside week coupled with a convincing break of initial support at 48.5 can trigger a pullback. NextEra Energy Inc. (NEE) 98 +/- 2 +/- 0.5 86.12 106-108 113-114 118-119 Sector Utilities Last Sale Price $.81 Rationale: This Utility name continues to progress higher via a well-defined 3-year uptrend channel. The top of the uptrend channel in the low-110s offers key near term resistance. Despite the defensive nature of NEE, we remain encouraged by the Oct '14 positive outside month pattern. Initial support lies at 98 +/- 2 or near the Jul/Aug/Sep '14 highs and 10- /- week moving averages. Secondary support lies at +/- 0.5 or near the Mar/Oct 14 lows. Initial supply is near 106-108 and above this to 113-114. Intermediate-term targets remain 118-119. UBS CIO WM Research 15 December 14 26
Nestle S.A. ADS (NSRGY) 75 75.79 63.38 61. 76 78.52-. 84-86 Sector Cons. Staples Last Sale Price $72. Rationale: The long-term bullish trend from the 09 lows still remains intact. In addition, a multi-year breakout above the 08 highs (not shown) during 10 reinforces the primary uptrend. However, since the mid-to-late 11 the relative strength trend against the S&P 0 Index has deteriorated indicating either a maturing trend or a lack of leadership/out of favor. Although the stock can continue to trend higher; it will likely appreciate at a slower pace than in the past and as a market performer this warrants a neutral outlook as initial support resides at.79 or the Oct 14 low. Novartis AG (NVS) -91/84.42 +/- 2 75 +/- 1. 96.97-101 106-107 Sector HealthCare Last Sale Price $93.52 Rationale: A convincing move above the multi-year highs in the mid-s reinforces the intermediate term uptrend. In addition, the onset of an inverse head and shoulders pattern breakout on the longer-term charts (not shown from 05-06) as well as a five year symmetrical triangle breakout is positive. A positive outside month on Feb 14 can help to extend the 1-year uptrend channel. However, July '14 negative outside month pattern and 10/3/14 negative outside week hints of a consolidation. A move above 96.97 sets new record highs and below -91 warns of a decline. UBS CIO WM Research 15 December 14 27
Oracle Corp. (ORCL) -36 32 +/- 1 29.52 42-43.19 46.47-52 Sector Technology Last Sale Price $39.95 Rationale: A surge above key resistance at 36. earlier in the year confirms a multi-year breakout. In addition, positive outside month patterns in Dec 13, Feb 14 and Aug '14 signal higher prices. Although the Jun/Sep 14 negative outside month warns of a consolidation, a move above 43.19 or the Jun '14 high can offset near term weakness allowing for a retest of 00 record high at 46.47. Initial support lies at -36 or near the Feb/Oct '14 lows. Initial supply is at 42-43.19 or the Jun/Aug/Sep/Nov '14 highs and -week ma. Key resistance lies at 46.47 or the Sep 00 highs. Occidental Petroleum Corp. (OXY) 110 110 69.-69.76 63.68 56. 79.-81. 85-88 93-95 Technical rating Bearish Sector Energy Last Sale Price $74.22 Rationale: We recommend downgrading OXY to a Bearish technical outlook. A negative outside week appeared on 6/27/14 coinciding with the recent peak in WTI Crude Oil (107.68). An ensuing decline (-27%) weakened the absolute and relative charts. A breakdown below 11 uptrend, a weekly death cross, a negative outside week (11/28/14), deteriorating relative against SPX and Energy peers, and multi-year head/shoulders top warn of strong selling pressure. Initial support is 69.5-69.76 coinciding with the Nov/Dec 12 lows and below this to 63.68 or the Oct '14 low. UBS CIO WM Research 15 December 14 28
Pepsico Inc. (PEP) 95 85 75 95 85 75 89.82 86 +/- 1 +/- 2-102 107-108 111-112 Sector Cons Staples Last Sale Price $94.74 Rationale: This Consumer Staples name has recorded new highs via a recent 4-year channel breakout. This important breakout renders upside targets into the low-s, medium term. While the relative strength against SPX needs further work on an intermediate term basis; it has shown marked improvement over the near-to-intermediate term. In addition, a breakout of the 1-year trading range between high-s and high-s, a golden cross buy signal, favorable moving averages and the Jul/Oct '14 positive outside month patterns are positive. Initial support is 89.82 (Oct '14 low). Pfizer Inc. (PFE) 15 15 29.- 27.12-28 24 +/- 0. 33.12.75 37-38 Sector Healthcare Last Sale Price $.95 Rationale: A 10-year downtrend breakout above 19 +/- 1 during 11 (not shown) has ignited a major trend reversal favouring a sustainable recovery. From the 09 bottom (11.62) this pharmaceutical name has retraced over % (.83) of its 1999-09 declines. However, repeated failures to maintain above the % level (.83) coupled with flat moving average trends, a 12 uptrend breakdown and 12/12/14 negative outside week pattern warrants a technical neutral trading range trend. Initial support lies near 29.5- or near the 10-/ - week moving averages. UBS CIO WM Research 15 December 14 29
Procter & Gamble Co (PG) Source: FactSet, UBS WMR as of 12 December 14 84-86 81.57 77.29 94. 99-106. Sector Cons. Staples Last Sale Price $89. Rationale: The longer-term outlook for PG continues to be Bullish. The 09 uptrend channel breakout last year in the low-s has met our technical projection of mid-s. As PG traded towards the mid-s in Nov 13, two negative outside weeks developed (11/29/13 and 12/13/13) and a head/shoulders top warned us of technical weakness. However, in recent months the relative strength versus S&P 0 has begun to stabilize. The Oct '14 breakout above 85.82 and the Oct '14 positive outside month signals the start of the next major rally. Initial support is at 84-86 or near -wk ma. Philip Morris International (PM) 81 +/- 1 73-75 67-68 -92 96.6-96.73 Sector Cons Staples Last Sale Price $84.42 Rationale: This Consumer Staples name retains its longer term bullish uptrend dating back to 08/09. However, it needs to clear above its Apr/May 13 highs of 96.6-96.73 to signal a sustainable, intermediate term recovery. A symmetrical triangle pattern remains intact and the convergence of two key moving averages suggests an inflection point. Although the Jun 14 negative outside month pattern will likely test the resiliency of the bulls, we note the onsets of the Oct '14 positive outside month as well as 12/05/14 positive outside week may neutralize future selling. UBS CIO WM Research 15 December 14
Royal Dutch Shell PLC ADS Cl A (RDSA) 85 75 85 75 61.5 +/- 1 57.97 52.23 66.29-.88 75 +/- 1 79- Sector Energy Last Sale Price $62.32 Rationale: RDSA has also declined in sympathy with its energy peers falling % from Jul-Nov '14. This has weakened both the absolute and relative (versus SPX) charts. Earlier, this Energy name showed technical signs of leadership by confirming its large 11 symmetrical triangle above the low s. However, the stock failed to maintain its 11 highs slipping back to crucial support at the low-to-mid s. Despite an oversold condition, a death cross sell signal (10 week ma crossing below the week ma) warn of a choppy and volatile environment into the end of the year. St. Jude Medical Inc. (STJ) 63. +/- 1 71. 74-76 78- Sector HealthCare Last Sale Price $66.33 Rationale: We remain favorable on STJ due to last year's breakout above the mid-s which has negated a five year head and shoulder top pattern prompting the recent rally to new highs. In addition, the Sep 13 positive outside month formation and subsequent 10/04/13, 10/18/13, 12/06/13 and 5/2/14 positive outside weeks bode well for higher prices. However, the 7/11/14 negative outside week had led to a healthy correction (-23.8%) from the Jul '14 highs. That said a successful test of the mid-s in Oct '14 coupled with a positive outside month helps to reinforce the bull trend. UBS CIO WM Research 15 December 14 31
AT&T Inc. (T) 38 36 34 32 28 26 24 38 36 34 32 28 26 24 Support Levels 31.74 27-28 33.33-34.09 37 +/- 0.5 39 Teva Pharmaceutical Industries Ltd. ADS (TEVA) Sector Comm. Services Last Sale Price $32.16 Rationale: We maintain a technical neutral stance on AT&T due to a broad trading range over the past few years. However, the potential rolling over the key (10- /- week) moving averages as well as a negative outside month pattern during Oct '14 and continued relative underperformance of the stock versus S&P 0 warns of further selling pressure. A convincing breakdown below initial support at 31.74 or the Feb '14 low confirms a lower low formation and forces a technical downgrade. Initial supply resides along 33.33-34.09 coinciding with the Dec '14 gap down. 52-54 47.36-48. 44.-.10 61-62 64.95 68-69 Sector HealthCare Last Sale Price $.92 Rationale: We maintain our technical bullish rating based on the recent breakout of a large symmetrical triangle dating back to 11. In addition, the Mar/May 13 positive outside months as well as a successful breakout earlier in 14 reaffirms a recovery. Based on this successful breakout, technical targets to the mid-s are possible, over time. The Oct '14 positive outside month pattern also keeps the Bulls in control. Initial support now lies at 52-54 or near the - week moving average. Secondary support lies at 47.36-48. coinciding with the Mar/Apr/Oct 14 lows. UBS CIO WM Research 15 December 14 32
Target Corp (TGT) 75 75 67.76-62 +/- 2 56 +/- 2 77-78 83 87-88 Sector C. Discretionary Last Sale Price $72. Rationale: We recommend upgrading TGT to a Bullish technical view. After witnessing a.6% correction from its Jun '13 highs, an impressive rally from oversold levels led to a move above 73. or the Jun '13 highs. A breakout above 73. suggests longer-term technical targets well into the low-to-mid s. Favorable 10/-wk moving averages, improving relative performance of the stock versus S&P 0 Index and a breakout of the 4+ year uptrend channel are bullish developments. Initial support lies along 67.76- or the Nov '14 gap up. 77-78 is key initial supply. Total S.A. ADS (TOT) 75 75.93-46.79 41.75-41.85-56 +/- 2 67.- Technical rating Bearish Sector Energy Last Sale Price $.12 Rationale: We recommend downgrading this Energy name to Bearish technical outlook as the result of the recent sharp pullback from the mid-s to the low-s. A weekly death cross sell signal and the onset of a Sep '14 negative outside month confirms a weak technical picture. In addition, continued relative underperformance of the stock versus S&P 0 warns of further selling pressure into the end of the year. Key initial support is.93-46.79 or the Apr/Jun '13 lows. Secondary support lies at 41.75-41.85 or the Jun/July 12 lows. or the Sep 11 low is long-term support. UBS CIO WM Research 15 December 14 33
Travelers (TRV) 110 110 Source: FactSet, UBS CIO WMR as of October 14 Sector Financials 99-96-96..83 106-107 110-111 114-115 Last Sale Price $103.16 Rationale: A breakout of a multi-year basing pattern above the mid-s in early 12 drives our long-term bullish outlook. We expect this insurance company can rally into the low-110s range over the medium term. The stock's relative outperformance versus SPX, rising moving averages and the Oct '14 positive outside month formation are positive. However, a near-term overbought condition coupled with a negative outside week on 12/12/14 hints of a consolidation to initial support at 99- or near the Nov '14 lows and the 10-week moving average. US Bancorp (USB) 38 +/- 2 34.5 31-32 -51-56 59- Sector Financials Last Sale Price $43.89 Rationale: This Financial stock has recovered all of its losses incurred during the subprime crisis. A move above its previous all-time highs at 42.23 keeps bulls optimistic on this stock. However, USB has traded in sympathy with many of its Financial peers from the mid-14 highs. While we note the near-term relative underperformance of this stock to S&P 0 Index, we also point to the bullish primary uptrend over the past few years. A breakout above 44 or the Jun/Nov 14 highs can extend the rally to the low-to-mid s. In addition, a12/5/14 positive outside is favorable. UBS CIO WM Research 15 December 14 34
Visa Inc Cl A (V) 2 2 0 0 1 1 1.89-2.82 243-244 218.-228.02 278-2 2-292 0-3 Sector Technology Last Sale Price $6.78 Rationale: A solid 5% rally from 08 lows basically sums up the bullish outlook on this stock. The stock witnessed an explosive rally from an absolute price and relative basis over the past 4+ years. However, the stock began to consolidate from the mid-2s or near the Jan 14 highs. A negative outside month in Mar 14 and a death cross sell signal in May 14 signal a consolidation. However, this correction has ended via recent positive outside month breakout above its Jan '14 record highs at 2. during Oct '14. Initial support lies at 1.89-2.89 or near the Nov '14 gap up. Vodafone Group PLC ADS (VOD) 33.07 28.63 27.49 37 39 +/- 0.5 42.14 Sector Comm. Services Last Sale Price $33.56 Rationale: In Aug 13, this Communication Services name has completed a breakout above an extensive trading range as defined by 31 +/- 1 on the upside and +/- 1 on the downside. An upside gap on 8/29/13 led to a positive outside week formation that extended the gains. After achieving a high of 42.14 in Feb 14, which is marginally above its 07 highs (near 41.58), an overbought condition developed. A violation of 13 uptrend and the rolling of the 10-/- week ma as well as deteriorating relative strength (versus S&P 0) suggest a neutral to defensive technical outlook. UBS CIO WM Research 15 December 14
Verizon Communications Inc. (VZ).-41. -37 47.56-48.56 51.73 53.66-54.31 Sector Comm. Services Last Sale Price $.58 Rationale: A multi-year breakout above 07 highs or 43.01 in late-12/early-13 is still constructive. However the negative outside week patterns during 1/10/14, 4/11/14, 4//14, 6/6/14, 8/1/14, 10/10/14, 12/5/14 and relative underperformance of the stock warn u s of increasing weakness. Although a positive outside week pattern on 7/4/14 and 7/11/14 and a July/Oct 14 positive outside month patterns are favorable, a gap down on 12/9/14 further weakened the charts. Initial support lies at or the Sep '13 low. Initial supply lies at 47.56-48.56 or the Dec '14 gap down. Walgreen Co. (WAG).19 57.75 54.86-.27 76.39-81 83.-84 Sector Cons. Staples Last Sale Price $74. Rationale: A 14% gap down on 08/06/14 not only hurt the near-term bullish trend but also led to a weekly death cross sell signal. The question is whether this recent bearish action signals a top? Despite the near-term weakness, we remain optimistic on WAG as long as the stock retains its multi-year breakout in the low-s. In addition, the 2/7/14 and 9/5/14 positive outside week patterns provide downside protection. A breakout above the Jun '14 highs at 76.39 signals the resumption of the primary bull trend..19 coinciding with the Sep '14 high is now initial support. UBS CIO WM Research 15 December 14 36
Wells Fargo & Co (WFC) 53 +/- 0.5 44.17-46.44 39.-.07 58-59 63-64 67-68 Sector Financials Last Sale Price $53. Rationale: A breakout of a 4+ year large ascending triangle pattern broadly drives our bullish rating. The sustainability of the stock above its previous all-time highs of 44.68 established during Sep 08 has attracted new buyers. Longer term projections well into the low-to-high s are possible based on the 4-year symmetrical triangle breakout. In the near-term, a sharp recovery during Oct '14 re-established its primary uptrend channel. In addition, 12/5/14 positive outside week pattern keeps investors optimistic. Initial support is at 53 +/- 0.5 or near the 10- /- week ma. Wal-Mart Stores Inc. (WMT) 85 75 85 75 75.59.-71. 67-68 87-88.09 91-92 94-95 Sector Cons. Staples Last Sale Price $83.81 Rationale: We recommend upgrading WMT to a Bullish technical outlook as higher prices are now likely. A 13-year breakout in 12 along the mid-to-high s hint of a major rally. Although 12/6/13, 5/16/14 and 6/13/14 negative outside week patterns have led to a trading range environment between low-s and low-s, a positive outside week formation on 11/7/14 led a successful breakout above low-s and now signals the start of the next rally to the low-tomid s. Initial support is 75.59 or the Nov '14 low. Initial supply lies at 88.09 or near the Nov '14 highs. UBS CIO WM Research 15 December 14 37