Technical Review of Stocks · Technical Review of Stocks Update –– 1 September 2015 CIO Wealth Management Research Peter Lee, Chief Technical Analyst, [email protected], +1-212-713-8888,

Technical Review of Stocks

Update –– 1 September 2015

CIO Wealth Management Research Peter Lee, Chief Technical Analyst, [email protected], +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.

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This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosuresbegin on page 27. 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 AAPL APPLE 4 ABBV ABBVIE INC 4 ABT ABBOTT LABORATORIES 5 ACN ACCENTURE 5 AGN ALLERGAN 6 ADSK AUTODESK 6 AET AETNA INC 7 AMAT APPLIED MATERIALS INC 7 AMP AMERIPRISE FINANCIAL INC 8 APC ANADARKO PETROLEUM CORP 8 BA BOEING 9 CL COLGATE-PALMOLIVE CO 9 CMCSA COMCAST CORP 10 CNC CENTENE 10 CSCO CISCO SYSTEMS INC 11 CVS CVS CAREMARK CORP 11 DOW DOW CHEMICAL 12 EMC EMC CORP/MA 12 EOG EOG RESOURCES INC. 13 GE GENERAL ELECTRIC CO 13 GOOGL GOOGLE INC 14 HLT HILTON WORLDWIDE 14 INTC INTEL CORP 15 IVZ INVESCO 15 JPM JPMORGAN CHASE & CO 16 KHC KRAFT HEINZ COMPANY 16 LRCX LAM RESEARCH CORP 17 MDLZ MONDELEZ INTERNATIONAL INC 17 MDT MEDTRONIC INC 18 MET METLIFE 18 MRK MERCK & CO 19 MSFT MICROSOFT INC 19 NKE NIKE INC 20 SLB SCHLUMBERGER LTD 20 SNDK SANDISK CORP 21 SO SOUTHERN CO 21 TXN TEXAS INSTRUMENTS INC 22 UNP UNION PACIFIC CORP 22 UTX UNITED TECHNOLOGIES CORP 23 VMW VMWARE INC 23


UBS CIO WM Research 1 September 2015 2

Changes since last report Additions

Name Ticker Centene CNC Deletions

Name Ticker McKesson MCK Qualcomm QCOM

Technical Rating Changes

Name Ticker Old New

The last update on these stocks was published on 2 August 2015. Going forward, our previously published rating for these stocks should not be relied upon.



Apple Inc (AAPL)

2011 2012 2013 2014 20152020

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Price 10-Week Moving Average 30-Week Moving Average

Source: FactSet, UBS CIO WMR as of 28 August 2015

Support levels Resistance levels

First Second Third First Second Third

101-104 92-95 82-85 118-120 124.5/127-130 132.97-134.54

Technical rating Bullish

Sector Technology

Last Sale Price $113.29

Rationale: We maintain our intermediate term Bullish technical stance on AAPL. A Jul '15 negative outside month pat-tern triggered a decline of nearly 32% from its Apr '15 all-time high (134.54). The ability to find support near its 50% retracement (94.78) from 2013-2015 as well as its 30-mo ma (93.25) generated a rebound back above its pivotal prior breakout at 100.73. While we note the technical damages incurred during recent decline the primary long-term up-trend remains intact as long as AAPL retains above 101/104 and 92-95. Key resistance is visible at 118-120 and 124.5.

AbbVie Inc (ABBV)

Jan '13 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '153030

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59-61 53.87-54.78 52/45.5-47.5 65-67 70.75-71.60 77-79


Sector Healthcare


Rationale: Although there is limited data on ABBV (first started trading on Dec '12), the primary trend remains up and hence our cautiously optimistic Bullish intermediate term technical outlook. However, on a near-term basis, negative outside week patterns (7/24/15 and 8/21/15) warn of a correction. ABBV has declined 24.8% from its Jul '15 highs before witnessing an impressive rally back above its prior key support along the bottom of its uptrend channel (59-61). Based on the recent sharp setback a technical basing effort is necessary between mid-to-high-50s and mid-to-high 60s.



Abbott Laboratories (ABT)

2011 2012 2013 2014 20152020

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44.12-44.67 42.30/39.28 35.65-36.65 47-49 51.74 55-55.50


Sector Health Care


Rationale: We still recommend maintaining a technical bullish stance on ABT. Following a successful breakout of mul-ti-year accumulation pattern above high-20s in early-2012, the stock witnessed a gradual rise within a 4-plus year up-trend channel. In addition, an inverse head and shoulder pattern in the relative charts suggests a leadership name. That said, the recent 18.2% decline from its Jul '15 highs (51.74) appears to have stabilized near key support along 41-43 corresponding to key support along 30-mo ma and bottom of uptrend channel. Key initial supply is near 47-49.

Accenture PLC (ACN)

2011 2012 2013 2014 2015

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88.43 83.50-85 74-76 96.5-97/99.5 104.16-105.37 121-123


Sector Technology


Rationale: We retain a cautiously bullish technical outlook on Accenture as long as it stays above its 5-year uptrend channel as well as its 2-year ascending triangle breakout near the mid-to-high 80s and the low-90s. Nonetheless, a negative outside week pattern on 8/14/15 led to 16.1% decline from Aug '15 highs before rallying off of the bottom of its uptrend channel (89) and its prior breakout (84-85). While we are encouraged by the successful test of support, a negative outside month warns of a trading range between mid-to-high 80s and the high-90s to the low-100s.



Allergan (AGN)

2011 2012 2013 2014 2015

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292-293/285 277.83-280 270 315-325 339-341 355-365


Sector Healthcare


Rationale: This leadership Healthcare name has also succumbed to the broad market decline 18.4% from its Jul '15 high (340.34). Nonetheless, the ability to rally from its key support near 280-290 or the Apr/May'15 lows, bottom of 2013 uptrend channel, 10-mo ma and continued relative strength readings support our favorable technical outlook. However, a negative outside day on 8/6/15, negative outside week on 8/21/15 and potential negative outside month warn of a maturing trend. Key support lies at 277.83-280 or Apr/May/Aug '15 lows. Key supply is 315-325.

Autodesk (ADSK)

2011 2012 2013 2014 20152020

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45 +/- 1 40-41.5 38-38.5/32 51-52 55.5-56 58.5/63-65


Sector Technology


Rationale: The recent weakness is noted over the past few months as ADSK has failed to follow through on its 1-plus year ascending triangle breakout above 56.68. In addition, a potential head/shoulders top pattern, an 8/21/15 negative outside week and a subsequent Aug '15 negative outside month pattern hint of selling pressure. Nonetheless, the abil-ity of this stock to maintain above key support near 45 +/- 1 may prevent a deeper correction. Failure to maintain the mid-40s confirms a top and opens the door for a retest of longer-term support near low-40s or the 2009 uptrend.



Aetna Inc (AET)

2011 2012 2013 2014 20152020

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108-110 100 +/- 2 93.51-95.72 118-120 125.47 134.40


Sector Healthcare


Rationale: A breakout of multi-year accumulation pattern above 60 in mid-2013 signal the start of an outperformance cycle. In due course, the sharp rally over the past 7-months has created an overbought condition prompting the recent pullback from its record high of 134.40 during Jun '15. A gap down on 7/6/15 first warned of a correction. The selling accelerated during the broad market on 8/24/15 as AET suffered a 30% setback declining to 93.51before stabilizing. While we remain optimistic intermediate term any violation of 108-110 can trigger a retest of Aug '15 low of 93.51.

Applied Materials Inc (AMAT)

2011 2012 2013 2014 201588

1010

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14-14.25 12.05-12.65 9.95 17.77/19-19.5 20.55-21.68 24.59-25.71

Technical rating Neutral

Sector Technology


Rationale: Failure to clear above key resistance near the 38.2% retracement from 2000-2008 (26.40) and the Nov 2003 highs (not shown) have led to the recent 44.6% correction from Dec '14 high. In the process a number key supports in-cluding the 10-/30-wk ma (17.5/20.4) and the 2013 uptrend near the 22-22.5 have been breached. The Mar '15 negative outside month, a large gap down in Apr/May '15 and an 8/14/15 negative outside week pattern warn of distribu-tion/selling. Initial support lies near 14-14.25 or the Aug '15 lows. Initial supply lies at 17.77 (Aug '15 high & 10-wk ma).



Ameriprise Financial Inc (AMP)

2011 2012 2013 2014 2015

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105-107 100-101 95.92/90-92 121-122 127-130 137-139


Sector Financials


Rationale: Recent failure to clear above the top of its 2009 uptrend channel (high-130s) and a negative outside week on 12/12/14 warned of a maturing rally. The ability to find support near its Oct '14 gap up and a positive outside week on 1/23/15 prevented a deeper setback earlier. Nonetheless, a weekly death cross sell signal and a recent negative out-side week on 7/24/15 prompted a 30.9% decline from Feb '15 high before witnessing a bounce back to current levels. Initial support lies at 105-106 or near the Oct '14 low. Key support is at 95.92 (Aug '15 lows) and then 90-92.

Anadarko Petroleum Corp (APC)

2011 2012 2013 2014 2015

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63.59 58.10 56.42 78.59 85-86.5/89-90 95.75-95.94


Sector Energy


Rationale: We retain a Neutral technical stance on this energy leadership name. Earlier, the ability to surge above the pivotal 2010 uptrend breakdown near the mid-to-high 80s has led to a technical rally to the mid-90s coinciding with the Nov '14 highs (95.93-95.98) as well as the 61.8% retracement (97.27) from the Aug-Dec '14 decline. Failure to breakout coupled with a negative outside day/week on 5/5/15 ignited a sell off. While a positive outside week on 7/31/15 can trigger a technical oversold rally; a 2-year head and shoulder top breakdown below low-70s confirms a top.



Boeing (BA)

2011 2012 2013 2014 2015

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125-127 120-121 113-115.14 135-137 140-145 155.5-159


Sector Industrials


Rationale: A breakout of a multi-year technical accumulation pattern above 107.83 in 2013 still suggests higher prices and is possible, over time. A 79-point technical base breakout renders longer-term technical targets to 185-190. How-ever, on a near-to-medium term basis, the Nov '14 to Feb '15 rally has met its target of 159-160 prompting the recent correction. Also, a negative outside week (7/24/15) and increased market volatility led to a sharp decline to 115.14 or the extension of a 2-year channel. Key near-term resistance is evident near its Aug '15 gap down at 135-137.

Colgate Palmolive Co (CL)

2011 2012 2013 2014 2015

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58.5-59.75 55-55.50 50.84 63-65/ 69.5-71.5 75-76


Sector Cons. Staples


Rationale: This leadership Consumer Staples stock has also succumbed to selling pressure by violating the bottom of its 2011 uptrend channel at 64-65. Negative divergences between the price chart and the relative strength and MACD charts warn of further consolidation. Despite the positive outside week (7/31/15) pattern, a gap down on 8/24/15 led to heightened volatility. CL has fallen 29% from its Mar '15 highs and established a lower low of 50.84 (Aug '15 low) before witnessing a sharp rebound. That said, a negative outside month on Aug '15 suggests key supply at 63-65.



Comcast Corp. Cl A (CMCSA)

2011 2012 2013 2014 2015

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51.5-52.5 49-50 46-47/41-42 57-58 60-61 65-67/70-71


Sector Cons. Disc.


Rationale: A break out of the multi-year accumulation pattern above the mid-to-high 30s in September 2013 signals a bullish condition. A 25 point accumulation pattern suggests a target of the low-to-mid 60s (achieved) over the near-to-intermediate term. After establishing a high of 64.99 in Jul '15, three negative outside week patterns on 7/24/15, 8/7/15 and 8/21/15, respectively led to the recent 23% decline from its Jul '15 highs (64.99). While we remain optimis-tic on the longer-term technical prospects of the stock, we suspect another retest of key support at 49-51.5 is likely.

Centene (CNC)

2011 2012 2013 2014 2015

1010

2020

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57.57 55-56 47-47.5 67-68.5 73.5-75.5 82-83


Sector Healthcare


Rationale: A breakout of a multi-year accumulation pattern above 18.96 (2005 highs) in mid-2011 and a subsequent breakout above 25.49 (early-2012 highs) in June 2013 support our longer-term bullish technical outlook. After recording an all-time high of 83 in Jul '15, two negative outside week patterns on 7/3/15 and 8/21/15 and a negative outside month on Jul '15 led warn of a correction. However, the recent 30.6% sharp decline has weakened the near-to-medium term trend as it is now testing key intermediate term support near the mid-50s. Key resistance is at 67-68.5 and 73.5-75.5.



Cisco Systems Inc (CSCO)

2011 2012 2013 2014 20151212

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24.75 23.03 22.49/20-20.22 26-27 29.21-30.31 33-34.24/36.34


Sector Technology


Rationale: A rare fan formation breakout via 3 downtrends during late-2011, early-2013 and recently in mid-2013 is technically significant as this confirms a major trend reversal and a sustainable intermediate term recovery. Nonetheless, two negative outside weeks (3/6/15 and 3/27/15) and a large gap down in Aug '15 led to a 24% correction from its Mar '15 highs before witnessing stabilizing near 23. While we remain optimistic, a negative outside month on Aug '15 warns of further consolidation. Key resistance resides along the Aug '15 gap down breakdown at 26-27 and then 29.21-30.31.

CVS Caremark Corp. (CVS)

2011 2012 2013 2014 2015

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97-98 92-93.68 88-90/82-85 105.5-107 113.58-113.76 116-117




Rationale: A large channel breakout during late-2012/early-2013 led to a steeper 2-year uptrend channel. In the pro-cess, a positive outside month (Oct '14), positive outside weeks (11/7/14 and 12/19/14), a breakout above the top of 2012 channel at 88-89, gap up (1/8/15) and a positive outside day on 2/10/15 have propelled to record highs. After making a high of 113.65 in Jul/Aug '15, the stock reversed direction falling 28.4% (following multiple gap downs in Aug '15 and negative outside day on 8/3/15 and 8/6/15) before generating a rally to key initial resistance at 105.5-107.



Dow Chemical Co. (DOW)

2011 2012 2013 2014 2015

2020

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40-41 35-36 30-31 46-47 49-50 54-55/56.75


Sector Materials


Rationale: Despite a trading range over the past year, we retain a bullish technical view on DOW as a breakout above the top of an ascending triangle pattern in 2013 at 36-37 (shown above) suggests higher prices. Nonetheless, a death cross signal, lower lows and lower highs pattern led to a 34.7% decline from between Jul '15 and Aug '15 before wit-nessing a bounce back to current levels. While the trends have weakened during the recent setback we are encourage to find DOW maintaining the mid-30s or the 38.2% retracement from 2009-2014 rally and the mid-2013 breakout.

EMC Corp (EMC)

2011 2012 2013 2014 2015

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24.25-24.50 22.66 21.45-21.51 25.5-26 27.5-28 29.24-30.92


Sector Technology


Rationale: The rally following a large gap up during Jul '14 failed to clear above the top of its 2013 uptrend channel near 31. A subsequent weekly death cross sell signal has led to the Jan '15-Jul '15 correction (-19.9%) as EMC has slipped back to the bottom of its 2011 uptrend channel. A 2-year head/shoulders top pattern warned of further volatili-ty. The stock has subsequently declined 19.1% into an Aug '15 low of 22.66 before witnessing a bounce to key initial resistance at 25.5-26. However, the Aug '15 negative outside month pattern still hints of further consolidation.



EOG Resources (EOG)

2011 2012 2013 2014 2015

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71.04-72.86 68.15-68.29 60-61 81-82 85-87.5 90-91/97-101


Sector Energy


Rationale: We remain cautious on EOG based on the following: (1) the moving average death cross sell signal (10-wk ma crossing below 30-wk ma) in mid-2014 and again during 1st half of 2015; (2) violation of its Apr '13 uptrend near 97-98; (3) a negative outside month pattern on May '15; and (4) the onset of a large 2-year head and shoulders top formation. A break down below neckline support near low-80s led to a 15.8% decline from Aug '15 top. Initial sup-port move up to the Aug '15 gap up at 71.04-72.86 and then to the Aug '15 lows at 68.15-68.29.

General Electric Co (GE)

2011 2012 2013 2014 2015

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22.50-23 21-21.50 19.37-19.87 26-26.50 28.68/30.5-31 33-33.5


Sector Industrials


Rationale: The 2000 downtrend breakout above 26.5 during Nov ‘13 (not shown) and a large gap up during 4/10/15 (25.83-27) are technically significant as this confirms a longer-term trend reversal. A subsequent Apr '15 positive out-side month pattern led to a move above 1 plus year downtrend channel. Nonetheless, the broad market sell-off in Aug '15 has led to GE declining 26.4% to a low of 19.37. A sharp technical rally back above its Jan '15 reaction low at 23.5-24 enables the resumption of the primary uptrend channel dating back to 2011. Key resistance is 28-28.68.



Google Inc (GOOGL)

2011 2012 2013 2014 2015

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585-595 540-560 529/491 713-725 740-750 770-780


Sector Technology


Rationale: A breakout of multi-year accumulation pattern above 373.98 in late-2012/early-2013 support a technical Bullish technical outlook. The stock then transitioned into uptrend channel via higher highs/high lows pattern. In due course a positive outside month in Oct '13 led to yet another breakout above low-500s. The stock accelerated and made a high of 615.03 by Feb '14 before witnessing a consolidation phase from over bought levels. A gap up in Jul '15 set the stage for yet another rally. A trading range is now likely between 585-595 and 713-725 over the medium term.

Hilton Worldwide (HLT)

Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '15

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24-24.5 20.72-20.93 20.55 25-26.25 27.5/29 31.34-31.6


Sector Consumer Disc.


Rationale: The breakout above a 1-year accumulation pattern above 26 during late 2014 is bullish. However a failure to clear above its Apr/May '15 highs (31.34-31.60) coupled with a negative outside week (5/1/15) and a violation of the Oct '14 uptrend led to a death cross signal by mid-Jul '15. More recently, the stock suffered a sharp decline of 33.8% plummeting to an Aug '15 low of 20.93 or testing its Oct '14 lows. The ability to find support here has trig-gered a technical rally to key initial resistance at 25-26.25 or the 38.2-50% retracement of its May-Aug '15 decline.



Intel Corp (INTC)

2011 2012 2013 2014 2015

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25-26 23.40-23.50 21.89 29-31 34.72-35.57 37.5-38.0


Sector Technology


Rationale: Although an inverse head and shoulder pattern in the long-term charts over a period of 12-years keeps in-vestors optimistic; a false breakout in the mid-30s or the upper end of the 2007-2009 uptrend channel warns of a Neu-tral trading range from a near-to-intermediate term perspective. Also, a death cross signal in early 2015 as well as a breakdown below its 1-plus year head and shoulder neckline support (high-20s) is negative. A violation of 25 opens the door to the low-20s or the 2010, 2011 and 2013 lows. Key resistance is 29-31or prior breakdown and 30-week ma.

Invesco (IVZ)

2011 2012 2013 2014 2015

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31-32 28-29 23-25 36-37 39-40 42.05


Sector Financials


Rationale: We maintain Bullish technical view on IVZ as long as the bullish trend starting from 2008/2009 lows remain intact. A move above 32.25 or the 2007 highs in early 2013 not only recovered all of its losses during the subprime crisis, but also completed a multi-year technical base breakout. However, the flattening of its key moving averages, the Dec '14 negative outside month pattern coupled with recent broad market decline led to a sharp decline to 31.03 be-fore recovering. Key support is 31-32. Violation here is negative and opens the door for a decline to 28-29/23-25.



JPMorgan Chase & Co (JPM)

2011 2012 2013 2014 20152525

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58-60 55 48-50 65-66 70-71/83-85 91-93


Sector Financials


Rationale: We maintain a technical Bullish outlook on JPM as it remains one of the leadership Financial name. The stock also suffered a setback of the magnitude of 29.1% from its Jul '15 highs or 70.61 to Aug '15 low of 50.07 be-fore generating an impressive rally back above its crucial support along 53 or 2013 technical breakout. Key initial re-sistance is visible 65-66 and above this to the recent highs in the low-70s. Given the sharp bounce we recommend traders raise initial support to 58-60 or the bottom of 2013 uptrend channel and the Mar/Apr '15 lows.

Kraft Heinz Company (KHC)

Oct '12 Jan '13 Apr '13 Jul '13 Oct '13 Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '15

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69-70 67-68 60-61.42 75.25-76 81.19-85.14 91.32




Rationale: While we have a limited trading history on this Consumer Staples name, the dominant trend remains bull-ish. On 3/25/15 the stock surged by over 35% after Heinz and Kraft Foods announced a merger to form the Kraft Heinz company. A large and potentially bullish flag pattern soon developed. However, failing to follow through with this breakout a subsequent large gap down occurred on 7/6/15. In addition, a negative outside week on 7/24/15, Jul '15 negative outside month led to retest of the Mar '15 low near low-60s. A trading range is likely between 70 and 76.



Lam Research Corp (LRCX)

2011 2012 2013 2014 2015

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68-69 65-66/62.85 57-60 75-76 81-82 84-85/91-93


Sector Technology


Rationale: We remain bullish on LRCX primarily due to its breakout above a large basing pattern dating back to 2000. The breakout (above 60) suggests targets into the mid-to-high 80s which was recently achieved during Dec '14/Feb/Mar '15 timeframe. In due course, the stock consolidated between high-60s and mid-80s before witnessing a breakdown below low-70s due to increased market volatility. The favorable relative strength versus S&P 500 Index and the ability to maintain key initial support near mid-to-high 60s can lead to the resumption of the primary uptrend.

Mondelez International Inc (MDLZ)

2011 2012 2013 2014 2015

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38-39 36.5-37.5 33-34 44-45 47-48.58 53-55




Rationale: A key breakout during Mar ‘13 above an 11-year technical base (not shown) supports our longer-term bull-ish outlook. The 19.5% correction during Jul-Oct '14 and the ensuing technical basing efforts hint of the next major rally. The mid-May '15 breakout above 39.25-39.5 renders next upside targets to 47-49 or near the top of its 2008 uptrend and then 54/59. In the near-term, despite a gap up in Jul '15, the broad market correction in Aug '15 led to a sharp decline from 48.58 to 38.91 or -19.9%. A trading range is now likely between high-30s and mid-to-high 40s.



Medtronic Inc. (MDT)

2011 2012 2013 2014 2015

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65-66 60-62 55-56 75.5-76 79-79.5 85-87


Sector HealthCare


Rationale: Despite the near-term volatility, we maintain a bullish stance on MDT. This Healthcare name has confirmed a major breakout above its 2000/2006 highs at 60-62 in Jan/Apr ‘14. In addition, the positive outside months on Aug '14, Oct '14 and May/Jul '15, relative outperformance of the stock versus S&P 500 Index favor higher prices over the intermediate-to-longer term basis. That said, the setback during Aug '15 has led to a negative outside month pattern indicating a wide trading range is now likely between low-to-mid 60s and the mid-to-high 70s.

MetLife (MET)

2011 2012 2013 2014 2015

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43.5-44.5 39.5-40.5 35-36 51.5-53 57-58 70-72


Sector Financials


Rationale: Although the longer-term trend from the 2009 lows still remains favorable, the stock has become increas-ingly volatile over the near-to-intermediate term. This is depicted by a choppy trading range trend between the mid-40s and the high-50s over the past two years as well as a rising wedge. After setting a new high of 58.23 in Jun '15, a negative outside week pattern on 7/14/15 warned of a correction. However, we are encouraged to find this Financial stock find key support near the mid-40s coinciding with the 2014 lows. Initial supply lies at 51.5-53 and then 57-58.



Merck & Co (MRK)

2011 2012 2013 2014 2015

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50-52.49 44.62-45.69 40-42 56-57 60-61.7 63-64/71-72


Sector Healthcare


Rationale: In 2013, this Pharmaceutical name broke out of a major 2000/2007 downtrend (not shown) along the low-40s. This action confirms the start of an intermediate term recovery. However, MRK has encountered major resistance near the low-to-mid 60s or the 2007/08 highs and 2014/15 highs. The ability to clear above key resistance in the low-60s can entice investors to return. Nonetheless, the Jun/Aug '15 negative outside month patterns, flattening key mov-ing averages and a break below 55 paints an increasingly cautious picture over the near-to-medium term.

Microsoft Inc. (MSFT)

2011 2012 2013 2014 2015

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39.72 37.50-38.51 34.63 48.41-50.05 54.50-55 59.97


Sector Technology


Rationale: A breakout of a large 13-plus year Head and Shoulders bottom pattern above key neckline resistance at 37-38 (in 2013) drives our technical bullish outlook on MSFT. The 21-points technical base suggests upside targets to as high as 59-60, longer term. However after establishing a high of 50.05 in Nov '14 the stock entered into a high level consolidation between low-40s and high-40s. Despite a large gap up in Apr '15 and a subsequent positive outside month pattern, the Aug '15 negative outside month hints of continued trading range over the near-term.



Nike Inc. Cl B (NKE)

2011 2012 2013 2014 2015

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105 +/- 1 100 +/- 2 94.50/90.69 120 +/- 2.50 126.25 132.50


Sector C. Discretionary


Rationale: We retain a technical bullish view on NKE based on following: breakout above its 2009 uptrend channel, positive outside month during Feb '14 and Aug '14, a gap up on 9/26/14, a large positive outside week during Sep '14 and favorable relative outperformance against SPX. However an overbought condition developed near the top of its 2013 uptrend which in turn led to 19.7% decline in Aug '15 before witnessing an equally impressive bounce from its Aug '15 low at 94.50. This leadership retail name is likely to set new all-time highs as it resumes its uptrend.

Schlumberger Ltd (SLB)

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66.85-68.01 64-64.50 59-60 81-82 85-87 93-95


Sector Energy


Rationale: A 5-year triangle pattern breakout (mid-90s) led to the Jul '14 highs at 118.76. However, this may have been a false breakout as SLB and energy stocks quickly reversed directions. The ensuing 36.34% decline from its Jul '14 highs has weakened the intermediate term trend. A 61.8% retracement from 2009-2014 at 67 provides key intermedi-ate term support. The ability to find support and the ability to stay above its Jan low at 75.6 may help to stabilize the recent strong selling pressure. Next key challenge (resistance) resides near 81-82 and then 85-87 or Jul/Aug '15 highs.



SanDisk Corp (SNDK)

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50-51/44.28 42.30 38.47 56-57.5/ 61-62/64-65 71-72.5


Sector Technology


Rationale: Gap down on 01/12/15 and again on 3/26/15 weakened both the absolute and relative charts. In addition, a lower-low pattern on the price charts, a death cross sell signal and a negative outside month on Mar '15 coupled with continued relative weakness of this stock to SPX led to a sharp correction in the recent past. Having said that, a 59% percent decline from the July 2014 top from 108.77 and a falling wedge pattern hints of a capitulation sell off. Nonetheless, key resistance is at 56-57.5. A breakout here can trigger a recovery to the low-to-mid 60s.

Southern Co. (SO)

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41.40-42.45 40.03 35.73 44.59/46.84 48.50-49 53.16


Sector Utilities


Rationale: A breakdown below 2009 uptrend line (in mid-2013) and the longer-term relative underperformance of the stock to SPX merits a Neutral technical outlook. Although positive outside week patterns on 11/28/14 and 12/19/14 hint of a potential bottom, the failure to surpass the extension of the 2009 uptrend in the low-50s may lead to solidify a head/shoulders top. In the near-term, 6/19/15 positive outside week pattern and the recent broad market weakness has heled many defensive stocks such as SO outperform S&P 500 Index, at least from a near-term perspective.



Texas Instruments Incorporated (TXN)

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43.49 40-41.50 37-38 52.45 56-58/60-61 65-67/70-72


Sector Technology


Rationale: A surge above 39.63 in 2013 above its 2007 highs and neckline resistance of a large 2002 head/shoulders bottom pattern confirmed a major breakout. However, an overbought condition into the recent rally toward the low-60s coupled with three negative outside weeks (3/6/15, 4/24/15 and 7/24/15), rolling of the 10-/30- wk ma as well a small head/shoulders top led to a 27.5% decline from Mar '15 high or 59.99 levels. While the Aug '15 negative outside month pattern paints a cautious outlook the ability to find key support in the low-40s can signal a recovery phase.

Union Pacific Corp (UNP)

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79.31 74.62 68-70 89-91 96.5-98.5 102-103


Sector Industrials

Last Sale Price $86.89 vmw

Rationale: We recommend a Neutral technical outlook as a negative outside month on Jan '15 and a weekly death cross sell signal hint of an intermediate term top. More recently, a negative outside week on 6/26/15 and again on 7/24/15 coupled with a violation of the Oct '14 pivotal low at 96.17 confirms a head/shoulders top. The stock correct-ed 36.3% from Feb '15 highs (124.52) finding a low of 79.31 on Aug '15. Based on an oversold condition and key initial support at 79.31 a technical oversold rally is possible to key initial resistance along high-80s to low-90s.



United Technologies Corp (UTX)

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87.17 80-82.50 74.44 97.30-100 104.95-109.51 120.66/124.45


Sector Industrials


Rationale: The July ’14 breakdown of 2012 uptrend and a death cross technical sell signal suggests a weak intermedi-ate-term trading range scenario. There is also significant resistance residing near 121-124 corresponding to a trend line dating back to late 1990s as well as the top of the 2008/2009 uptrend channel. In addition, a solid gap down on 07/21/15 further weakens both absolute and relative strength charts versus S&P 500. A move below Oct '14 low opens the door for further selling; potentially to low-80s over time. Initial support lies at 87.17 or the Aug '15 low.

VMware Inc (VMW)

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73.65-76.04 64.86-65.02 60 84-86 92-93/95-97 103-104

Technical rating Bearish

Sector Technology


Rationale: Our bearish technical outlook on VMW is based on the following negative developments: a Fan formation breakdown, a complex head and shoulders top pattern, a negative outside month pattern (Apr '14) and increased vola-tility via downside gaps (Mar/Apr/Oct ‘14 and Jan/Aug '15). Failure to convincingly clear above the extension of the third fan line near 100-105 has led to the recent correction. More recently, negative outside week patterns on 6/26/15, 8/7/15 and 8/21/15, Aug '15 negative outside month pattern warn of another major sell off below 74-76.



Statement of Risk Stock market returns are difficult to forecast because of fluctuations in the economy, investor psychology, geo-political conditions and other important variables.

Appendix

Technical Research Rating Definitions

Rating Corresponding Rating Category

Definition and criteria

Bullish Buy Well-defined, reliable uptrend, an increase in the rate of change (or strong momentum) and confirming technical indicators

Neutral Hold Trading range trend, a flat rate of change and confirming technical indicators

Bearish Sell Negative or weakened trend, momentum and confirming technical indicators

N/A Not enough historical data to make an evaluation

Description and Methodology This report provides technical analysis on a dynamic list of stocks that, we believe, are of a wide interest. Please note that technical views are highly variable and will change with market conditions. Accordingly, these ratings are only valid as of the publication date. Because CIO WMR equity sector analysts and WMR technical analysts employ different analytical methodologies, technical recommendations are, at times, contradictory to fundamental recommendations for the same security. For the latest company ratings by WMR sector analysts, please refer to the most recent equity sector research reports, located in the Equity Section on the Online Services Research website. For more background on the content of this report, please see Technical Analysis Research Primer, 18 February 2010.



Appendix Term / Abbreviation Description / Definition

% +or- Moving

Average (DMA)

The percentage above or below the moving average (see Moving Average) is used to help measure an overbought or over-sold 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 100.

30-Week Moving Average

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.

Adjusted Relative Strength (ARS)

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.

Base A chart pattern marking a period of accumulation following a downtrend. The larger the base, the greater the upside poten-tial following its completion. A base can take many forms.

Beta 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 se-curity’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.

Blow off stage to a major rally

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 dra-matic decline as investors/traders try to exit the market/security at the same time.

Breakdown A technical term indicating a downside resolution of a chart pattern. Its significance is determined by the same factors gov-erning a breakout.

Breakout A technical term indicating an upside resolution of a chart pattern. Breakouts can take many forms, and their degree of im-portance is determined by the significance of the chart pattern which preceded it.

Broadening Top For-mation

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.

Channel

A chart pattern comprised of two parallel trend lines, which form a trading band. Channels take the form of uptrend, down-trend and horizontal.

Death Cross The opposite of a golden cross, this is a crossover on the chart resulting from a security’s shorter-term moving average falling below its longer-term moving average. Technicians often see this as a bearish technical sign indicating the market has turned negative on the security.

Downtrend Line

A trend line connecting successively lower peaks for a stock (or market). Its technical significance is determined by the same factors governing an uptrend line.

Fan reversal pattern The fan formation is a technical pattern that is based on the use of multiple trend lines to denote a major trend reversal. The fan pattern gets its name as it basically resembles a “fan”. It should have a minimum of three trend lines (uptrends or down-trends). The break out/break down of the third downtrend/uptrend often completes the fan pattern and signals the start of a major trend reversal. The starting point of these trend lines should come from a significant peak or a significant trough.

Fibonacci Retrace-ment Level

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 100%.

FSR Forecast Stock Return is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months.

Gap

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.



Appendix Term / Abbreviation Description / Definition

Golden Cross 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 favour of the security.

Head-and-Shoulders Pattern

This technical formation is one of the best known of the reversal patterns. There are two types of head-and-shoulders pat-terns 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. Head-and-shoulders formation often is comprised of a left shoulder, a head, and a right shoulder, and a line drawn across its shoulders defines its neckline. The breaking of the neckline to the upside confirms a head-and-shoulders bottom breakout, which signals the start of a bullish reversal favouring higher prices. The violation of neckline to the downside validates a head-and-shoulders top, reaffirming a bearish reversal of lower prices.

Internal Trend Line A single trend line connecting at least several high and low points for a stock (or market) over time.

Linear Regression Band

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.

Moving Average (m.a.)

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 ques-tion. Many moving averages exist.

MRA 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).

Neckline Sup-port/Resistance

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 poten-tial 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 head-and-shoulders top formation. Conversely, neckline resistance is a trend line drawn across the tops of the left shoulder, the head and the right shoulder. When prices break above this neckline re-sistance level and keep on rising, it typically completes the head-and-shoulders bottom pattern.

Overbought 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.

Oversold 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.

Positive/Negative “Outside” Day

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 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.

Support 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.

Top 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.

Triangle Patterns There are three different types of Triangle patterns – Symmetrical, Descending and Ascending. Symmetrical Triangle is con-sidered 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 down-trend line.



Appendix

Statement of Risk

Equities - Stock market returns are difficult to forecast because of fluctuations in the economy, investor psychology,geopolitical conditions and other important variables.

Required Disclosures

Analyst Certification

Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that withrespect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflecthis or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be,directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the researchreport.

CIO Wealth Management Research equity selection systemEquity sector strategists provide three equity selections: Most Preferred (MP), Least Preferred (LP) and Bellwetherdesignation.

Rating definitionsMost Preferred*: The equity sector strategist expects the stock to outperform the relevant benchmark in the next 12months.Least Preferred*: The equity sector strategist expects the stock to underperform the relevant benchmark in the next12 months.Bellwether: Stocks that are of high importance or relevance to the sector and which the equity sector strategist expectsthe stock to perform broadly in line with the sector benchmark in the next 12 months.*A stock cannot be selected as Most Preferred if UBS Investment Research rates it a Sell, while a UBS Investment ResearchBuy rated stock cannot be selected as Least Preferred.

Restricted: Issuing of research on a company by CIO WMR can be restricted due to legal, regulatory, contractual or bestbusiness practice obligations which are normally caused by UBS Investment Bank’s involvement in an investment bankingtransaction in regard to the concerned company.

Technical Research Rating Definitions

Rating Corresponding Rating Category Definition and criteriaBullish Buy Well-defined, reliable uptrend, an increase in the rate of change

(or strong momentum) and confirming technical indicators.Neutral Hold Trading range trend, a flat rate of change and confirming

technical indicators.Bearish Sell Negative or weakened trend, momentum and confirming

technical indicators.N/A Not enough historical data to make an evaluation.

For a complete set of required disclosures relating to the companies that are the subject of this report, please mail arequest to UBS CIO Wealth Management Research Business Management, 1285 Avenue of the Americas, 20th Floor,Avenue of the Americas, New York, NY 10019.

Disclosures (1 September 2015)Abbott Laboratories 1, 4, 6, 7, 8, 9, AbbVie 4, 8, 9, Accenture Plc 6, 7, 8, Aetna Inc. 1, 3, 4, 5, 6, 7, 8, 9, 11; AmeripriseFinancial 1, 3, 5, 8, 9, 10, Anadarko Petroleum 1, 2, 4, 6, 7, 8, 9, Apple Inc. 4, 6, 7, 8, 9, Applied Materials Inc. 6, 7,8, Boeing Co. 6, 7, 8, 10, Centene Corp. 8, Cisco Systems Inc. 1, 3, 5, 6, 7, 8, 9, 10, 11; Colgate-Palmolive Co. 1, 2, 6,7, 8, 11; Comcast Corp. (Cl A) 1, 4, 5, 8, 9, 10, 11; CVS Health 6, 7, 8, Dow Chemical Co. 3, 4, 6, 7, 8, 9, 10, GeneralElectric Co. 3, 4, 5, 6, 7, 8, 9, 10, Google Inc. 3, 4, 6, 7, 8, 9, Hilton Worldwide 1, 8, 11; Intel Corp. 3, 4, 6, 7, 8, 9, 10,Invesco 2, 3, 4, 5, 6, 7, 8, 9, JPMorgan 1, 3, 4, 5, 6, 7, 8, 9, 11; Kraft Foods Group Inc. 4, 9, LAM Research Corp. 8,McKesson Corp. 8, Medtronic Inc. 1, 3, 4, 8, 9, Merck and Co Inc 3, 4, 5, 6, 7, 8, 9, 10, MetLife 1, 3, 4, 5, 6, 7, 8, 9, 11;



Appendix

Microsoft Corp. 1, 3, 4, 6, 7, 8, 9, Mondelez International 1, 3, 5, 6, 7, 8, 9, 11; Nike Inc. 8, Sandisk 8, Schlumberger6, 7, 8, Southern Company 1, 6, 7, 8, 11; Texas Instruments Inc. 6, 7, 8, The Kraft Heinz Company 8, Union Pacific 6,7, 8, United Technologies Corp. 6, 7, 8, 10, VMware, Inc 6, 7, 8,

1. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investmentbanking services are being, or have been, provided.2. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company's common equitysecurities as of last month's end (or the prior month's end if this report is dated less than 10 days after the most recentmonth's end).3. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investmentbanking securities-related services are being, or have been, provided.4. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securitiesservices are being, or have been, provided.5. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking servicesfrom this company/entity within the next three months.6. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non-investment banking securities-related services are being, or have been, provided.7. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services otherthan investment banking services from this company.8. UBS Securities LLC makes a market in the securities and/or ADRs of this company.9. Within the past 12 months, UBS Securities LLC has received compensation for products and services other thaninvestment banking services from this company/entity.10. The equity analyst covering this company, a member of his or her team, or one of their household members has along common stock position in this company.11. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement ofsecurities of this company/entity or one of its affiliates within the past 12 months.



Appendix

Disclaimer

In certain countries UBS AG is referred to as UBS SA. This publication is for our clients’ information only and is notintended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. It does notconstitute a personal recommendation or take into account the particular investment objectives, financial situation andneeds of any specific recipient. We recommend that recipients take financial and/or tax advice as to the implicationsof investing in any of the products mentioned herein. We do not provide tax advice. The analysis contained herein isbased on numerous assumptions. Different assumptions could result in materially different results. Other than disclosuresrelating to UBS AG, its subsidiaries and affiliates, all information expressed in this document were obtained from sourcesbelieved to be reliable and in good faith, but no representation or warranty, express or implied, is made as to its accuracyor completeness. All information and opinions are current only as of the date of this report, and are subject to changewithout notice. This publication is not intended to be a complete statement or summary of the securities, markets ordevelopments referred to in the report. Opinions may differ or be contrary to those expressed by other business areas orgroups of UBS AG, its subsidiaries and affiliates. Chief Investment Office (CIO) Wealth Management (WM) Researchis published by UBS Wealth Management and UBS Wealth Management Americas, Business Divisions of UBS AG (UBS)or an affiliate thereof. CIO WM Research reports published outside the US are branded as Chief Investment Office WM.UBS Investment Research is written by UBS Investment Bank. Except for economic forecasts, the research processof CIO WMR is independent of UBS Investment Research. As a consequence research methodologies applied andassumptions made by CIO WMR and UBS Investment Research may differ, for example, in terms of investment horizon,model assumptions, and valuation methods. Therefore investment recommendations independently provided by the twoUBS research organizations can be different. The analyst(s) responsible for the preparation of this report may interactwith trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing andinterpreting market information. The compensation of the analyst(s) who prepared this report is determined exclusively byresearch management and senior management (not including investment banking). 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UBS Financial Services Inc. accepts responsibility for the contentof a report prepared by a non-US affiliate when it distributes reports to US persons. All transactions by a US person inthe securities mentioned in this report should be effected through a US-registered broker dealer affiliated with UBS, andnot through a non-US affiliate. The contents of this report have not been and will not be approved by any securities orinvestment authority in the United States or elsewhere.Version as per April 2015.UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior writtenpermission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect.© UBS 2015. The key symboland UBS are among the registered and unregistered trademarks of UBS. All rightsreserved.



Documents

Technical Review of Stocks · Technical Review of Stocks Update –– 1 September 2015 CIO Wealth Management Research Peter Lee, Chief Technical Analyst, [email protected], +1-212-713-8888,