Technical Review of Stocks - The Technical Analyst...Technical Review of Stocks CIO Wealth...

Technical Review of Stocks CIO Wealth Management Research 19 October 2014

Peter Lee, Chief Technical [email protected]

+1-212-713-8888, ext.01

Broader list

This report provides technical analysis on stocks that, we believe, are of a wide interest. This list is not a template forthe 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 disclosuresbegin on page 41. 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 PageAMGN AMGEN INC 4 ITW ILLINOIS TOOL WORKS INC 21AMZN AMAZON.COM INC 4 JNJ JOHNSON & JOHNSON 21AZN ASTRAZENECA PLC 5 KMB KIMBERLY-CLARK CORP 22BAC BANK OF AMERICA CORP 5 LB L BRANDS INC 22BEN FRANKLIN RESOURCES INC 6 MCD MCDONALD'S CORP 23BMY BRISTOL-MYERS SQUIBB CO 6 MHFI MCGRAW HILL FINANCIAL 23BP BP PLC 7 MMM 3M CO 24BRK.B BERKSHIRE HATHAWAY - CLASS B 7 MO ALTRIA GROUP INC 24 C CITIGROUP INC 8 NEE NEXTERA ENERGY INC 25CAT CATERPILLAR INC 8 NSRGY NESTLE SA/AG 25CELG CELGENE CORP 9 NVS NOVARTIS AG 26COP CONOCOPHILLIPS 9 ORCL ORACLE CORP 26COST COSTCOWHOLESALE CORP 10 OXY OCCIDENTAL PETROLEUM CORP 27CPB CAMPBELL SOUP CO 10 PEP PEPSICO INC 27CSX CSX CORP 11 PFE PFIZER INC 28CTL CENTURYLINK INC 11 PG PROCTER & GAMBLE CO 28CVS CVS CAREMARK CORP 12 PM PHILIP MORRIS INTERNATIONAL 29CVX CHEVRON CORP 12 RDSA ROYAL DUTCH SHELL PLC 29D DOMINION RESOURCES INC 13 SBUX STARBUCKS CORP 30DD DU PONT (EI) DE NOMOURS 13 STJ ST JUDE MEDICAL INC 30DE DEERE AND CO 14 T AT&T INC 31DEO DIAGEO PLC 14 TEVA TEVA PHARMACEUTICALS 31DIS THE WALT DISNEY COMPANY 15 TGT TARGET CORP 32DOW DOW CHEMICAL 15 TOT TOTAL SA 32DUK DUKE ENERGY CORP 16 UPS UNITED PARCEL SERVICE 33EOG EOG RESOURCES INC. 16 USB U.S. BANCORP 33F FORD MOTOR CO 17 V VISA INC-CLASS A 34FB FACEBOOK INC 17 VOD VODAFONE GROUP PLC 34GILD GILEAD SCIENCES INC 18 VZ VERIZON COMMUNICATIONS INC 35GIS GENERAL MILLS INC 18 WAG WALGREENS CO 35GSK GLAXOSMITHKLINE PLC 19 WFC WELLS FARGO 36HD HOME DEPOT INC 19 WMT WAL-MART STORES INC 36HON HONEYWELL INTERNATIONAL INC 20 XOM EXXON MOBIL CORP 37IBM INTL BUSINESS MACHINES CORP 20

Technical Review of Stocks

UBS CIO WM Research 20 October 2014 2

Changes since last report Additions Name Ticker

Technical Rating Changes Name Ticker Old New BP PLC ADS BP Bullish NeutralConocoPhillips COP Bullish NeutralChevron Corp. CVX Bullish NeutralDuke Energy Corp. DUK Neutral Bullish EOG Resources EOG Bullish NeutralL Brands, Inc. LB Neutral Bullish Royal Dutch Shell Plc RDSA Bullish NeutralTotal SA TOT Bullish NeutralExxon Mobil Corp. XOM Bullish Neutral

The last update on these stocks was published on 25 August 2014. Going forward, our previously published ratings for these stocks should not be relied upon.



Amgen Inc. (AMGN)

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Price 10-Week Moving Average 30-Week Moving Average

Source: FactSet, UBS CIO WMR as of 16 October 2014 Support levels Resistance levels

First Second Third First Second Third 124.39-128.63 115-120 105-108 138-140 144.46 155-156

Technical rating Bullish Sector HealthCare

Last Sale Price $130.45

Rationale: A bearish Ascending Broadening Wedge pattern still warns of a maturing trend. However, the following also suggest higher prices, longer term: 1) Jul '14 positive outside month; 2) Positive outside week (8/15/15); 3) Positive outside day (8/14/14); 4) Gap up (7/30/14), 5) 14-year channel breakout above 96.5 (6/13) renders upside to 145.5 and 6) 1-year channel breakout above135 (8/14) suggests upside to 145-147. AMGN recently achieved it medium term tar-get of 144.46 (9/19/14) prompting a pullback back to its 30-wk ma and to the 7/30/14 gap up at 124.39-128.63.

Amazon.com Inc. (AMZN)

2010 2011 2012 2013 2014

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First Second Third First Second Third 284-287.5 259-265 246-247 325-349 364.85 379-383

Technical rating Neutral Sector C. Discretionary


Rationale: The ability of AMZN to retain its longer term support near the 2008 uptrend (286), the May 2014 low (284.38) and the 50% retracement from 2011-2014 rally at 287.5 prevented a deeper decline. However, the Jan to May '14 downturn and the weekly death cross sell signal has further weakened the intermediate term trend. A large negative outside week pattern on 7/25/14 hints a retest of key support near 284-287.5. The ability to retain this key support can lead to a short term rally to initial resistance at 323-327 or the 10-wk/30-wk ma and then Sep high at 349.



AstraZeneca PLC ADS (AZN)

2010 2011 2012 2013 2014

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First Second Third First Second Third 66.55 61.79-63.75 54-55 76.24-76.83 82.68 85



Rationale: AZN has completed a 4-year technical base breakout on a surge above 52.5-53.5 last year. This breakoutignited a major rally that achieved several technical targets including 66-67 or the Oct '06 record high and 76-77 or the projected technical target based on late-2013 breakout above 53.53. The May '14 rally to the low-80s also achieved its longer term resistance along the extension of the 1998/2006 trend line (not shown). An overbought condition coupled with Apr '14 gap ups and May '14 gap down warns of a trading range between low-to-mid 60s and mid-70s.

Bank of America Corp (BAC)

2010 2011 2012 2013 201444

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First Second Third First Second Third 14.36-14.84 13.02 11.48-12.13 17.41 18.03 19.10-19.86

Technical rating Neutral Sector Financials


Rationale: BAC came close to breaking out of the top of its 2011 uptrend channel at 18 in Mar '14. However, failureto decisively clear above 18.03 soon led to another correction as this banking name once gain tested its pivotal Dec '11 uptrend channel at 14.37. The ensuing rally into Sep/Oct '14 has faded again as it struggled to clear above the top of its channel at 17.41. A negative outside week (10/10/14) and a gap down (10/15/14) warn of a retest of the 2011 up-trend and May '14 lows at 14.5-15. Below this confirms a top and signals a deeper correction to 13.02 and 11.5-12.



Franklin Resources Inc. (BEN)

2010 2011 2012 2013 2014

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First Second Third First Second Third 48-49 44-45 41-42 54.5-55 58-59 65-67

Technical rating Bullish Sector Financials


Rationale: The intermediate-to-longer term trend remains Bullish as evident by a major uptrend channel (48-49) and a prior triangle breakout (44-45) dating back to 2007/2009 (not shown). However, a negative outside month during Jan'14 (58.87) and a recent smaller triangle (2012) breakdown below 53.5 signal a consolidation to the mid-to-high 40s. The ability to maintain this key suggest can lead to the resumption of the prevailing uptrend channel rendering upside targets to the mid-to-high 50s (near-term), mid-60s (medium-term) and mid-70s (long-term).

Bristol-Myers Squibb Co (BMY)

2010 2011 2012 2013 2014

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First Second Third First Second Third 46.30-47.52 43.76-44.37 41-42 52.17-53 55.5-57.5 60-61



Rationale: Pharmaceutical Index (DRG) has appreciated 145% and BMY has gained 259% from its 2008/2009 bot-tom. The 4-plus year uptrend channel breakout above 39 in 2013 has exceeded its technical target of 47-48. In fact, it has also surpassed its 61.8% retracement (52.38) from its 1999-2008 declines by rallying to 57-57.5 in Jan/Mar '14. Although higher prices to 60-61 or the 76.4% retracement is possible, a negative outside month (Jan '14) and a week-ly death cross sell signal (Apr '14) warn of a correction to the mid-to-high 40s before the resumption of the uptrend.



BP PLC ADS (BP)

2010 2011 2012 2013 2014

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First Second Third First Second Third 39.5-40.5 35.25-36.25 33.62 45-46 51-53.5 60-62.5

Technical rating Neutral Sector Energy


Rationale: Energy sector has suffered technical breakdowns during recent sharp decline. BP has failed to surpass its key resistance along the 50% retracement (53.29) from 2007-2010 declines. However, the negation of a large 4-year symmetrical triangle breakout (Nov/Dec 2013) via breakdown below 45-46 is bearish and we will now move to a Neu-tral technical stance as it tests next major support at 39.5-40.5 or the late 2012/203 lows. Violation here opens the door for the next downturn to 35-36 or the 2011-2012 lows. An oversold condition may trigger a bounce to 45-46.

Berkshire Hathaway Inc. – Class B stock (BRK.B)

2010 2011 2012 2013 2014

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First Second Third First Second Third

129-132 121-124 115-117 136-138 140.5-143.5 146.5-147.5



Rationale: BRK.B remains a leader within the Financial sector. Two breakouts above the mid-80s and above low-100slast year render upside targets to mid-130s, near term, low-to-mid 140s, medium term and then to 155-157.5, longer term. After trading to its initial targets (129.73) two negative outside days (5/2/14 and 6/2/14) and failure to clear above its 1998 trend line led to a consolidation. This pullback lasted 2 months as BRK.B held onto key support (mid-120s) prompting recent rally to new highs. Key initial support moves up to 30-wk ma and the Aug breakout (129-132).



Citigroup Inc. (C)

2010 2011 2012 2013 2014

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First Second Third First Second Third 45.06-45.18 40.1-43.68 36.5-38.5 51-52 54.13-55.28 63-65

Technical rating Neutral Sector Financials


Rationale: The sharp decline in US interest rates has impacted the Financial sector. C continues to encounter formida-ble resistance near the mid-50s or close to the 2009/2013/2014 highs. A short-term trading range has developed be-tween the Jun 2013/Apr 2014 lows (45.06-45.18) and the mid-50s. A convincing breakout above 55.28 renders upside targets into the mid-60s. On the other hand, a convincing breakdown below 45.06 suggests a decline to 43.68-40.1 or the 38.2-50% retracement from 2012-2014 rally and then to the 61.8% retracement and the 2011 uptrend (mid-30s).

Caterpillar Inc. (CAT)

2010 2011 2012 2013 2014

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First Second Third First Second Third 88-90 78.25-80.25 67.5-69 99-102 111.46 116.25-116.95

Technical rating Neutral Sector Industrials


Rationale: A symmetrical triangle breakout along 87-89 in late 2013 followed by a breakout above the 2013 high(100) signal the start of a technical recovery. However, this Industrial name remains confined to a large medium termtrading range between the low-80s and the 116-117. On a shorter term technical perspective an oversold conditioncan promptly lead to 78.25-80.25. Trading above this key initial resistance is needed to allow for a rally to 99-102 and then to the recent Jul '14 high at 111.46. Initial support now rises to 88-90 and then to the high-70s to the low-80s.



Celgene Corp. (CELG)

2010 2011 2012 2013 20142020

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First Second Third First Second Third 81.65-83.5 78.15 73-74 89-92 96-96.5 101-103



Rationale: Similar to many Biotechnology names, a parabolic 2-year rally (198%) has created a steep uptrend channel. Despite recent breakdown there appears to be sustained relative strength in this Healthcare name as it relates to theBiotech sector and to SPX Index. Nonetheless, we recommend closely monitoring the 30-week moving average at 83.5 as well as the 50% retracement (81.65) from Apr to Sep '14 rally. The ability to maintain this support can trigger an-other rally. A breakdown below 81.65-83 also signals a decline to 61.8% retracement (78.15) and then to 73-74.

ConocoPhillips (COP)

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First Second Third First Second Third 62-63 4.5-76 71-72 86-87 97-98 115-120



Rationale: A breakout above the low-60s in May ‘13 renders upside targets to the low-80s (near term) and then themid-80s (secondary). Both of these targets have been achieved. The recent sharp downturn in the past month has now broken key intermediate term support at 72-75 or the Apr '14 breakout and 50%-61.8% retracement from Feb-Jul '14 rally. We recommend moving to a technical Neutral outlook as the ability to maintaining key support at 62-63 or the May '13 major breakout and Feb '14 low can lead to a new trading range between low-60s and low-to-mid 70s.



Costco Wholesale Corp. (COST)

2010 2011 2012 2013 2014

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First Second Third First Second Third 118-120 114.5-115.5 109.5-110 127.78-128 131.41 138-140

Technical rating Bullish Sector Cons. Staples


Rationale: A well-defined 2009 uptrend channel bounded by 118-120 on the downside and 138-140 on the upside re-mains intact. As long as this trend continues, we retain a bullish technical view on the stock. However, the weak relative strength readings against SPX as well as the violation of the 2012/2013 uptrend (115-117) warn of volatile and trading range condition. A convincing move 127.78-131.41 or the recent Sep/Oct '14 highs can lead to a retest of the top of up-trend channel at 138-140. Above this confirms a channel breakout and renders upside to 156-158, longer term.

Campbell Soup Co. (CPB)

2010 2011 2012 2013 2014

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First Second Third First Second Third 41 +/- 1 38-39.5 36-37 46.67-48.83 52.5-53.5 58-60/62.88



Rationale: An ascending triangle breakout in 2013 above the high-30s renders an upside target to 48-49, which was achieved during May ‘13 (48.83). A 1-year constructive technical still bodes well for higher prices. A convincing breakout above the May 2013 downtrend at 46-47 confirms a symmetrical triangle breakout suggesting targets to 48.08-48.83 (near term) or the May/Aug '14 highs, the mid-50s (medium term) and then the low-60s (longer term). Key initial support resides near 41 +/- 1 or the Jun '12 uptrend and the 50-61.8% retracement from 2012-2013 rally.



CSX Corp. (CSX)

2010 2011 2012 2013 20141010

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First Second Third First Second Third 29-30 27-27.5 24.5-25.84 32.5-33 37-38 40-41

Technical rating Bullish Sector Industrials


Rationale: Dow Jones Transportation Average continues to trade to all-time highs carrying most of its components to record highs. Despite the broad market decline CSX continues to set new price highs and relative strength highs sug-gesting leadership. A breakout above the top of a 1-plus year uptrend channel at 32.5-33 can trigger the next major rally to mid-30s (near term), 37-38 (intermediate term) and then to low-40s (longer term). Repeated failures to clear above the low-30s may warn of a consolidation back to the bottom of 1-year channel at 29-30 and then to 27-27.5.

CenturyLink Inc. (CTL)

2010 2011 2012 2013 2014

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First Second Third First Second Third 37.5-39 35.69 33.75-34.25 41.69-43.34 46 +/- 1 49.94

Technical rating Neutral Sector Comm. Services


Rationale: The strong and persistent selling from 2013 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 formida-ble resistance along the 2008/2011 downtrend (not shown) near the low-40s. The ability to surpass this downtrend confirms a major breakout. Initial support moves up to the 7/29/14 gap up (37.90-38.79) and the 30-week ma (37.63).



CVS Caremark Corp. (CVS)

2010 2011 2012 2013 2014

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First Second Third First Second Third 74.5-75 72-72.5 68-69 82.5-83.5 86-87 90-91



Rationale: The channel breakout during late 2012/early 2013 suggests upside targets to the low-to-mid 70s. CVS has surpassed this technical target reaching a record high of 83.45 in Oct' 14. A normal consolidation into the mid-70s can set the stage for a retest of the all-time highs and then key resistance along the top of the 2011 uptrend at 86-87 rending upside to the low-90s. On the other hand, violation of initial support at 74.5-75 or the Jun/Aug '14 lows andthe 30-week ma warn of a correction to the bottom of the Nov 2012 uptrend and the Feb 2014 gap up at 68-69.

Chevron Corp (CVX)

2010 2011 2012 2013 2014

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First Second Third First Second Third 106.64 100.66 95-95.73 116-117 122-124 130-135



Rationale: Although this Energy name has shown technical signs of emerging as a leader the recent sharp sell-off in the Energy sector has hurt the intermediate term trend as evident by the violation of the bottom of 2011 uptrend channel at 116-117. A weekly death cross sell signal also warns of lack of conviction buying. We move to a Neutral technical stance and believe that the technical damages incurred in the past month or so will likely require a rebuilding of a technical base. Although an oversold rally to the prior breakdown at 116-117 is possible we would err on the side of caution, near term.



Dominion Resources Inc. (D)

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First Second Third First Second Third 64.25-65.5 60-61 58-58.5 71.32-72.25 73.75 80-81

Technical rating Bullish Sector Utilities


Rationale: Although this has been one of the stronger Utility names the strong rally has slowed considerably soon af-ter failing to clear above key resistance in the mid-70s coinciding with the top of its 2009 uptrend channel as well as the top of the 2013 uptrend channel. A trading range has developed in the past few months between the mid-60s and the low 70s. Violation of 64.25-65.5 warns of a deeper correction to the high-50s to the low-60s. Trading above71.32-72.25 allows for the resumption of the rally to 73.75, near term and then to the low-80s, intermediate term.

E.I. DuPont de Nemours & Co. (DD)

2010 2011 2012 2013 2014

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First Second Third First Second Third 63-64.35 59.5-60 56-57 66.19-67.30 69.71 73-75

Technical rating Bullish Sector Materials


Rationale: The confirmed May ‘13 breakout of a triangle pattern (above 54) coupled with a 3-year ascending triangle breakout in Jul ‘13 (above 58) still render upside technical targets to the mid-70s (intermediate term) and then to mid-80s (longer term). However, violation of the Nov 2013 uptrend via a large Jun '14 gap down and the rolling over of the10- /30-week moving averages (67.5/67) have weakened the near-term uptrend. Nonetheless, a violation of 63-64.35is needed to signal a top and the start of a deeper correction to major support along the prior breakout at 57-59.



Deere and Co (DE)

2010 2011 2012 2013 2014

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First Second Third First Second Third 79-80 75-76 69-70 86-87 94.5-95.5 99-100



Rationale: Two triangle patterns including the 2011 symmetrical triangle (breakout above 94.5-95.5) and the smaller 2013 triangle (breakout above 94) hint of an accumulation phase. However, an inflection point is near as DE tests the bottom of the two symmetrical triangles around 79-80. The ability to maintain above this key support zone can triggera recovery to 86-87 (near term), 94.5-95.5 (medium term) and then 99-100 (intermediate term). On the other hand, failure to retain 78-80 confirms a major technical breakdown and warns of a deeper correction to the low-to-mid 70s.

Diageo PLC ADS (DEO)

2010 2011 2012 2013 2014

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First Second Third First Second Third 110-112 98.5 93.12 114.5-116.5 122-123 131-133

Technical rating Neutral Sector Cons. Staples


Rationale: Although the longer term trend still remains bullish, we remain concerned about the flat to neutral near-to-intermediate term trend over the past two years. A well-defined 2-year triangle between 117-118 and 131-134 may have been violated during the recent downturn. The proliferations of three negative outside months during Jan '14, Jul '14 and Sep '14 as well as the rolling of 10-/30- week ma (123/124) warn of strong selling. Failure to reverse above a prior key support at 117-118/123-124 coupled with violation of 110-112 suggests downside to 98.5 and then 93.12.



The Walt Disney Co (DIS)

2010 2011 2012 2013 20142020

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First Second Third First Second Third 78-80 76-77 67-70 93-94 101-102 101-102

Technical rating Bullish Sector Cons. Disc.


Rationale: This leading Consumer Discretionary has broken out of a major 15-year technical base (not shown) above 43.26 during early 2012. This breakout renders upside to the mid-70s which was achieved late last year. Since then a 3-plus year uptrend channel has developed. The top of the channel is at 93-94 and the bottom of channel is at 78-80providing key resistance and support. Although DIS can still trend higher via its uptrend channel a convincing break below the bottom of the channel at 78-80 may ignite a deeper correction towards the mid-70s and then 67-70.

Dow Chemical Co. (DOW)

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First Second Third First Second Third 42.23-43.43 40.5 36-37 46.5-47.5 50-51 54-55

Technical rating Bullish Sector Materials


Rationale: The breakout last year above the top of an ascending triangle pattern at 36-37 signals the start of a recov-ery. A subsequent breakout above the 2008/2011 highs at 42.23-43.43 this year further reaffirms a sustainable turna-round. Next upside targets are: 55.5-56.75 (Mar 2005 record highs), 62-63 (intermediate term) and then to 73-75(longer term). However, the sharp rally over the past year has ended via the break of its uptrend at 49.5-50.5. The roll-ing over of 10- / 30- week ma in the low-50s now suggests a decline back to the prior breakout in the low-40s.



Duke Energy Corp. (DUK)

2010 2011 2012 2013 2014

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First Second Third First Second Third 74-75 69-70 64-65 81-81.5 84-85 91-93



Rationale: The 5-plus year uptrend channel remains intact between 69-70 and 83-84 suggesting higher prices, over time. We are impressed with the recent key breakout above the mid-70s (74.5-75.5) coinciding with the May '13 and May '14 highs. This major breakout is technically significant and warrants a technical upgrade to Bullish. The breakout renders upside targets to 81.5 or the 2001 record high (near term), mid-80s (medium term) and then to the low-90s (longer term). The prior breakout at 74-75 provides key initial support and secondary support is at 69-70.

EOG Resources (EOG)

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First Second Third First Second Third 80-81 76-78 69-70 95.5-96.5 99-101 110-112.5



Rationale: Similar to many of its Energy peers the sharp sell-off in EOG forces a downgrade to Neutral technical out-look. The following key near to intermediate term supports were breeched: (1) 103-105 or the Jul '14 lows and the 30-week ma; (2) the large gap up on 5/6/14 (99.71-101.84); (3) 94-95 or the 38.2% retracement from 2011 to 2014 rally. Next key support lies along 80-81 coinciding with the convergences of key trend lines. Violation here can trigger a de-cline to the mid-to-high 70s and the high-60s to low 70s. Key initial resistances are 95.5-96.5/low-100s.



Ford Motor Co (F)

2010 2011 2012 2013 2014

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First Second Third First Second Third 13.26-13.42 12.10-12.33 11 14.30-14.50 15.12-15.69 16.0-16.5



Rationale: During Oct '13 rally to 18.01, F failed to surpass major resistance corresponding to the 2002/2011 highs at 18.23-18.97. In the ensuing correction both of the 10-/30- week moving averages (16.38/16.10) and its Aug 2012 up-trend (15.5) were breached. F has now broken its crucial 38.2% retracement (14.50) from Jul '12 to Oct '13 rally prompting the recent downturn to 13.2 or just below the 50% retracement from 2012 to 2014 rally. Although a tech-nical rally to key initial resistances at 14.5-15.69 is possible, F can also retest its 61.8% retracement at 12.33.

Facebook Inc. (FB)

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

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First Second Third First Second Third 70-72 67-68.5 62-63 76.74 79.71 85-87

Technical rating Bullish Sector Technology


Rationale: Despite the volatile market environment in recent weeks, we remain encouraged by resiliency of FB and itsability to maintain above the bottom of its large Jul '14 gap up in the low-70s. In addition, the Aug '13 uptrend and 30-week moving average at 67-68 can provide additional key support if the market suffers another setback. The key challenge in the days/weeks ahead is for FB to maintain its support and to surge above initial resistance at 76-77 and its Sep '14 all-time high of 79.71. Accomplishing this will trigger the next major rally towards the mid-to-high 80s.



Gilead Sciences Inc. (GILD)

2010 2011 2012 2013 2014

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First Second Third First Second Third 91.73-92.63 87-88.5 83-85 100-102.5 105-107 110.64

Technical rating Neutral Sector HealthCare


Rationale: This Biotechnology name has rallied 74.24% from its recent Apr '14 low (63.5) to the Sep '14 high (110.64). Although higher prices are possible the recent failure to clear above the top of a Broadening Rising Wedge pattern hints of another consolidation similar in scope of the Feb-Apr '14 correction of 25%. The recent decline to 91.73 is now testing the 38.2% retracement (82.63) from Apr to Sep '14 rally. Failure to maintain this key support opens the door for a decline to 87-88.5 or to the 50% retracement and possibly to the prior key breakout at 83.

General Mills Inc. (GIS)

2010 2011 2012 2013 2014

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First Second Third First Second Third 47-49 46 44 55-56 58-60 65-66



Rationale: After being confined to a 4-plus year uptrend channel between the high-30s and the mid-40s, 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 to a higher record high of 55.69 by Jun '14. Since then the stock has quietly consolidated its gains and isnow approaching key support along 47-49 or near the convergence of the 1-year triangle breakout. The ability to maintain support here can trigger another rally back to initial resistance at 51-52 and then to 53.07-55.69.



GlaxoSmithKline PLC ADS (GSK)

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First Second Third First Second Third 41.68-42 38.45-38.76 34-36.5 48-49 51.5-53 55.5-56.75

Technical rating Bearish Sector HealthCare


Rationale: This Healthcare name continues to deteriorate as evident by key technical breakdowns including the viola-tion of the bottom of 2013 uptrend channel at 52-53 and the violation of the bottom of a major 5-year uptrend chan-nel at 48-49 during Jul '14. This recent break down reinforced a key intermediate term trend reversal. GSK has now fallen to its Nov '12 lows near 41.68 thereby relinquishing almost all of its nearly 2-year gains. On a near-term basis, anextreme oversold condition can trigger a technical rally to recent breakdown at 48-49 and possibly to 51.5-53.

Home Depot (HD)

2010 2011 2012 2013 2014

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First Second Third First Second Third 84.62-86.57 81.5-83.25 75-78 93.75-94.79 97-100 120-123

Technical rating Bullish Sector C. Discretionary


Rationale: An accelerated channel breakout during early 2012 above mid-40s led to a much steeper 2-year uptrend channel. The violation of the bottom of the uptrend channel in the mid-70s during Aug/Sep 2013 warned of a top. However, this leading Home Improvement Retailer soon transitioned into a new trading range channel between 72.21-74.61 and 82.57-83.1. A recent breakout above the top of the channel at 83.1 renders upside targets to 93-94 (near term), 97-100 (medium) and 120-123 (long-term). Initial support is the Aug '14 gap up (84.62-86.57) and low-80s.



Honeywell International Inc. (HON)

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First Second Third First Second Third 80.56-82.89 75-76 69-71 90-93 96-98 102-104



Rationale: A 13-year technical breakout in the low-to-high 60s during the late-2012/early-2013 (not shown) suggests higher prices, over time. However, on a near-to-intermediate term basis the strong rally over the past year has slowed as it struggles near key medium term resistance at 98-100 or the top of its 2011 channel. A convincing breakout here can help to extend the rally to 102-104 (medium-term). However, recent breakdown below 90 and repeated failures toexhibit a breakout coupled with violation of key initial support at 88-89 has triggered a decline to the low-80s.

International Business Machines Corp (IBM)

2010 2011 2012 2013 2014100100

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First Second Third First Second Third 180 +/- 1 170 +/- 2 160 +/- 2 190 +/- 1 199.21-200.94 206.15-210.05

Technical rating Neutral Sector Technology


Rationale: The technical weakness in this Technology name over the past two years is depicted by an AscendingBroadening Top pattern. The breakdown of the 2010 uptrend near the high-190s first warned of a potential top. A large downside gap also developed on 4/19/13 between 196.5 and 206.15. This was quickly followed by a break of the2009 uptrend also near 195. The Dec 2013 positive month pattern keeps the bulls optimistic on a recovery. However,8/1/14 and 10/10/14 negative outside week patterns hints of further consolidation over the near-term.



Illinois Tool Works Inc. (ITW)

2010 2011 2012 2013 2014

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First Second Third First Second Third 80 +/- 2 76.25 70.1-71.1 89.50 94-95 100



Rationale: A breakout above 59-60 during late-2012 reaffirms our Bullish outlook. In addition, the surge above a 4-plus year rising uptrend channel during Apr/May ’13 in the low-70s is technically significant as this action can lead to the continuation of the uptrend. More recently, a positive outside month patterns on Sep/Dec ’13 and Aug '14 shouldkeep the bulls optimistic. Having said that, the stock witnessed some profit booking which is in line with the weaknessin the broader market. Initial support lies along 80 +/- 2 or near the Mar/Oct '14 lows and 2012 uptrend line.

Johnson and Johnson (JNJ)

2010 2011 2012 2013 2014

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First Second Third First Second Third 95 +/- 1 90 86.09 100 +/- 1 106.74-108.77 115-116

Technical rating Bullish Sector Healthcare


Rationale: In 2013, JNJ has finally broken out of its large ascending triangle pattern that dates back to the late-1990s. This break out above 70-73 renders an intermediate-term target to 115-116. In addition, constructive relative strength readings against S&P 500 Index favor higher prices, over time. However, the July ’14 negative outside month patternwarns of a near term consolidation before resumption of the primary uptrend. Initial support is at 95 +/- 1 or the Jul/Aug/Nov ’13 and Jan ’14 highs. Initial supply lies along 100 +/- 1 or near the Jul/Aug '14 lows and 30-week ma.



Kimberly-Clark Corp. (KMB)

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First Second Third First Second Third 103.50 100 +/- 1 91.5-93 110-114.45 125-126 132-133



Rationale: Although we remain optimistic on the longer-term technical prospects of the stock, the following near term negative developments warrant a cautious near to intermediate term technical outlook: 1) Breakdown below a rising pennant formation negates its bull trend (near-term); 2) Negative outside months (Jul '14 and Oct '14) and 3) Contin-ued relative weakness (since Apr '13) with reference to S&P 500 Index. Initial support lies at 103.50 corresponding to the Jul/Aug ’14 lows. Initial supply is visible at 110-114.45 or near the July/Oct ’14 highs and 30-week ma.

L Brands Inc. (LB)

2010 2011 2012 2013 20141010

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First Second Third First Second Third 60 +/- 2 53.03 48.77-50.78 68.61 70-72.50 75-76

Technical rating Bullish Sector C. Discretionary


Rationale: After a solid performance in 2013, LB had been erratic during 2014. A 12/6/13 negative outside week and a subsequent negative outside month in Dec '13 have led to a 20% drop from its Dec ’13 highs. Also Apr ’14 negative outside month hinted of further volatility. However, positive outside weeks on 2/7/14, 5/9/14 and again on 6/27/14 stillsuggest sustained buying interests. In addition, a golden cross buy signal and superior relative performance versus SPX merit a technical upgrade of LB to Bullish. Initial support is at 60 +/- 2 or near the Apr/Jul ’14 highs and the 30-wk ma.



McDonald’s Corp (MCD)

2010 2011 2012 2013 2014

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First Second Third First Second Third 86-89 83.31 80 +/- 1 97.30 103.78 110



Rationale: 2009 uptrend (dash line) breakdown in 2012 triggered a sharp decline to the bottom of its 2008 uptrend. The ability to maintain 83.31 during this pullback has led to another technical rally to key near term resistance coincid-ing with the 2013/2014 highs at 103.78. A convincing breakout here can send MCD to 115-116, over time. However, repeated failures to breakout followed by a violation of 2008/09 uptrend (mid-90s) and Sep '14 low (90.53) warn of a decline to the Jan ’13 gap up (86-89) and below this to longer term support at 83.31 or Nov ’12 lows/2003 uptrend.

McGraw Hill Financial Inc. (MHFI)

2010 2011 2012 2013 2014

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First Second Third First Second Third 75 +/- 2 70 +/- 1 65 84.81-87.28 93-94 100-101



Rationale: The bullish trend remains intact on MHFI as evident by a confirmed breakout of a 4-plus year uptrend channel. Despite a volatile year and the minor breech of the 1-year uptrend and the flattening of the 10-wk/30-wk moving average a major breakout above the mid-60s or the top of the five year uptrend channel and a subsequent move above the prior high of 72.50 (Jun 2007) support the continuation of the primary bull trend. In addition, positive outside weeks (3/7/14, 4/18/14 and 5/9/14) reaffirms bull trend. Initial support is at 75 +/- 2 or the May/Aug ’14 lows.



3M Co (MMM)

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First Second Third First Second Third 130 +/- 1 125 +/- 1 120 +/- 1 140 +/- 1 147-148 155-156



Rationale: A classic inverse head and shoulder pattern breakout dating back to 2004 (not shown) offers bullish impli-cations, at least from an intermediate-to-longer term perspective. The upward sloping neckline corresponds to 107.50-108.50. The right and left shoulder corresponds to the high-60s and the low-70s, respectively. A breakout during the first quarter of 2013 and a positive outside week pattern during 4/18/14 reaffirms an accumulation phase. However, the stock has pared gains in sympathy with the recent market correction. Initial support is at 130 +/- 1 or Mar '14 lows.

Atria Group Inc. (MO)

2010 2011 2012 2013 20141515

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First Second Third First Second Third 43.50-44 40 +/- 0.5 33-35 48-49 51-52 55-56

Technical rating Neutral Sector Cons Staples


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 mid-30s and the mid-to-high 40s. A breakout above the 2012 uptrend (shown above) has triggered a rally towards the top of the wedge. In addition, relative outperformance of the stock in the current challenging market environment indicates defensive/income money in stock. While we note the positive technical developments, the risk-reward profile is no longer attractive for investors.



NextEra Energy Inc. (NEE)

2010 2011 2012 2013 2014

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First Second Third First Second Third 90 +/- 0.5 86.12 81.50 98.63-102.51 108-109 112-113



Rationale: This Utility name continues to retain its favorable uptrend since breaking out from an ascending triangle pattern in early 2012. This breakout suggests upside targets to the low-110s (longer term). Despite the defensive na-ture of NEE, we remain encouraged by the favorable risk-reward profile from an intermediate to longer-term basis. Nonetheless, 7/4/14 and 8/1/14 negative outside week patterns hint of a consolidation over the near-term. Initial sup-port lies at 90 +/- 0.5 or near the Mar/Oct ’14 lows. Initial supply is near 98.63-102.51 or the Apr/Jul/Aug '14 highs.

Nestle S.A. ADS (NSRGY)

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First Second Third First Second Third 66.55 63.38 61.50 74 78.52-80.65 84-86



Rationale: The long-term bullish trend from the 2009 lows still remains intact. In addition, a multi-year breakout above the 2008 highs (not shown) during 2010 reinforces the primary uptrend. However, since the mid-to-late 2011 the rela-tive strength trend against the S&P 500 Index has deteriorated indicating either a maturing trend or a lack of leader-ship/out of favor. Although the stock can continue to trend higher; it will likely appreciate at a slower pace than in thepast and as a market performer this warrants a Neutral outlook. Initial support is at 65.55 or near the Oct ’13 lows.



Novartis AG (NVS)

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First Second Third First Second Third 84.42 80 +/- 2 75 +/- 1.50 91-92 95-96 100-101



Rationale: We retain our Bullish technical stance on NVS. A convincing move above the multi-year highs in the mid-60s reinforces the intermediate term uptrend. In addition, the onset of an inverse head and shoulders pattern breakouton the longer-term charts (not shown from 2005-2006) 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 out-side month pattern and 10/3/14 negative outside week pattern hints of a consolidation over the near-term.

Oracle Corp. (ORCL)

2010 2011 2012 2013 2014

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First Second Third First Second Third 37.38 35.44 32 +/- 1 42-43.19 46.47 50-52

Technical rating Bullish Sector Technology

Last Sale Price $38.46*

Rationale: A surge above key resistance at 36.50 earlier in the year confirms a multi-year breakout. In addition, posi-tive outside month patterns in Dec ’13, Feb ’14 and Aug '14 signal higher prices. Although the Jun/Sep ’14 negativeoutside month warns of a consolidation, a move above 43.19 or the Jun '14 high can offset near term weakness allow-ing for a retest of 2000 record high at 46.47. Initial support lies at 37.38 or near the Mar '14 lows. Below the Feb '14 low at 35.44 acts as secondary support. Initial supply is at 42-43.19 or the Jun/Aug/Sep '14 highs and 10- /30-wk ma.



Occidental Petroleum Corp. (OXY)

2010 2011 2012 2013 2014

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First Second Third First Second Third 84.50-86 77-78 72-73 95 +/- 2 100-101 105-107



Rationale: A breakout of a 4-plus year symmetrical triangle pattern above the low-90s suggests the start of a recovery. However, the continued relative underperformance of the stock in relationship to S&P 500 Index suggests a Neutral performer. Although a positive outside month pattern during Feb/Aug ’14 is bullish and hints of a retest of the 2012 highs (106.68), the 6/27/14 negative outside week pattern also suggest a correction to 84.5-86 or near the Feb/Oct '14 lows and below this to 77-78. Initial supply lies at 95 +/- 2 or the recent 2012 uptrend breakdown.

Pepsico Inc. (PEP)

2010 2011 2012 2013 2014

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First Second Third First Second Third 86 +/- 1 80 +/- 2 74-75 96.22 102 107-107.50

Technical rating Bullish Sector Cons Staples


Rationale: This Consumer Staples name has recorded new highs via a recent 4-year channel breakout. This important breakout renders upside targets into the high-90s to low-100s. In addition, we note the stock broke out of sidewaystrading range between high-70s and the high-80s over the past year. While the relative strength against SPX needsfurther work, at least from an intermediate term basis; it has improved near term. Although a potential Oct '14 nega-tive outside month pattern could lead to a consolidation, the Jul '14 positive outside month pattern is also bullish.



Pfizer Inc. (PFE)

2010 2011 2012 2013 2014

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First Second Third First Second Third 27.12-28 24 +/- 0.50 21 +/- 0.50 31 +/- 0.50 32.50 +/- 0.50 34-35.50

Technical rating Neutral Sector Healthcare


Rationale: A 10-year downtrend breakout above 19 +/- 1 during 2011 (not shown) has ignited a major trend reversal favouring a sustainable recovery. From the 2009 bottom (11.62) this pharmaceutical name has retraced over 50%(30.83) of its 1999-2009 declines. However, repeated failures to maintain above the 50% level (30.83) coupled with a death cross signal (10-week ma crossing below 30-week ma) and the 2012 uptrend breakdown warrants a technical Neutral rating. Initial support lies near 27.12-28 or mid-2013 lows. Initial supply is at 31+/-0.5 or the Jul/Sep '14 highs.

Procter & Gamble Co (PG)

2010 2011 2012 2013 2014

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Source: FactSet, UBS WMR as of 16 October 2014 Support levels Resistance levels

First Second Third First Second Third 77.29 73.6-75.40 70.75-71.75 85-86 90-91 94.50



Rationale: We remain optimistic on the longer-term outlook of PG. The 2009 uptrend channel breakout last year in the low-70s has recently met our technical projection of mid-80s. As PG traded towards the mid-80s in Nov ’13, two negative outside weeks developed (11/29/13 and 12/13/13) and a head/shoulders top warned us of technical weak-ness. While the intermediate term relative strength as it relates to SPX is neutral we are encouraged by the short-termrelative strength during the recent broad market correction. A breakout above 85.82 warrants a technical upgrade.



Philip Morris International (PM)

2010 2011 2012 2013 2014

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First Second Third First Second Third 81 +/- 1 73-75 67-68 86-87 91-92 96.6-96.73

Technical rating Neutral Sector Cons Staples


Rationale: This Consumer Staples name retains its longer term Bullish uptrend dating back to 2008/09. However, it needs to clear above its Apr/May 2013 highs of 96.6-96.73 to signal a sustainable, intermediate term recovery. A bear-ish rising wedge pattern and the convergence of two key moving averages warn of an impending battle between the bulls and the bears. Although a positive outside week pattern on 2/28/14 has reversed the selling pressure, we believe the Jun ’14 negative outside month pattern will likely test the resiliency of the longer term PM bulls.

Royal Dutch Shell PLC ADS Cl A (RDSA)

2010 2011 2012 2013 2014

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First Second Third First Second Third 65-67 61.5 +/- 1 57.97 72 +/- 2 79-80 83-84



Rationale: A positive outside month pattern during Apr/Jul/Oct ’13 as well as Feb ’14 kept investors optimistic for an intermediate term recovery. Also, in 2014, this Energy name has managed to surge above the top of its 2011 symmet-rical triangle. However, the stock faced resistance in the low-80s (or the Jun/Jul ’14 highs). This triggered a sharp pull-back of nearly 21% drop. The Jul '14 to present correction has weakened both the absolute and relative charts forcing a technical downgrade to Neutral stance. Initial support is 65-67 or the Oct/Nov '13 lows and the 2010/2011 uptrends.



Starbucks Corp. (SBUX)

2010 2011 2012 2013 2014

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First Second Third First Second Third 69 +/- 1 66.30 62 76-78 82.50 85-86



Rationale: The Bullish trend from the 2008-09 lows continues to suggest higher prices over longer term. Also, a multi-year breakout above the 2006 highs in late-2011 reaffirms an uptrend. However, an overbought condition has trig-gered a correction from its Dec ’13 high. In the process a death cross sell signal warned us of a deeper correction. The ability of this stock to bounce back from the Feb/Apr ‘14 lows stabilized the selling pressure. In the near-term, the stock paints a Neutral mixed view with frequent moving average crossovers and 10/10/14 negative outside week pattern. St. Jude Medical Inc. (STJ)

2010 2011 2012 2013 2014

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First Second Third First Second Third 55 +/- 1 51 +/- 1 45 +/- 2 61.42 66 70-72



Rationale: We remain favorable on STJ due to last year's breakout above the mid-50s 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 week patterns keep bull optimis-tic. However, 7/11/14 negative outside week and potential short-term head/shoulders top hint of a consolidation to initial support at 55 +/- 1 or prior breakout levels or 2011 highs. Initial supply is 61.42 or near the Oct ’14 highs.



AT&T Inc. (T)

2010 2011 2012 2013 2014

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First Second Third First Second Third 33.5 +/- 0.5 31.74 27-28 37 +/- 0.5 39 42.79



Teva Pharmaceutical Industries Ltd. ADS (TEVA)

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First Second Third First Second Third 47.36-48.35 44.50-45.10 38.97 55-57 61-62 64.95



Rationale: We maintain our technical Bullish rating based on the recent breakout of a large symmetrical triangle da-ting back to 2011. In addition, the Mar/May ’13 positive outside months as well as a successful breakout earlier in2014 reaffirms a recovery. Based on this successful breakout, targets to the mid-60s are possible, over time. However, a potential Oct '14 negative outside month pattern also hints of a consolidation. On the downside, initial support lies at 47.36-48.35 coinciding with the Mar/Apr/Oct ’14 lows. Initial supply is at 55-57 or the 2011/14 highs.

Rationale: Although the longer term trend dating back to 2008/2009 remains favorable, we maintain a technical Neu-tral stance on AT&T due to the mixed picture from both a relative strength basis and from an absolute price perspec-tive. A recent downtrend breakout hints us of the start of a sustainable recovery. On the other hand, the numerousbuy/sell signals via the weekly 10-wk/30-wk moving average cross overs, potential for negative outside month patternin Oct '14 and continued relative strength underperformance of T to SPX suggest a challenging trading environment.



Target Corp (TGT)

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First Second Third First Second Third 56 +/- 2 47.25 45.28 62.50-64.65 67.25 73.50



Rationale: Despite a recovery from the 2008/2009 lows, TGT has struggled into the end of 2013 and into early 2014.The 07/26/13 negative outside week formation first warned of selling pressure. The selling escalated into a 20% cor-rection from its Jun '13 highs (73.50). A subsequent break below the low-60s further confirms a major technical breakdown and paints an increasingly weak technical picture from both an absolute and relative basis against SPX. Having said that, the 2/28/14 and 8/22/14 positive outside week hint of near-term support near the mid-to-high 50s.

Total S.A. ADS (TOT)

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First Second Third First Second Third 54-55 50.49 45.93 60-62 67.70-70 74.22



Rationale: This Energy name witnessed multiple breakouts starting with the 4+ year downtrend channel reversal dur-ing 2013 and signaled a recovery. A positive outside month in Feb ’14 month suggest higher prices. However, an over-bought condition coupled with the sudden weakness in the Energy sector led to a sharp pullback from mid-70s to mid-50s. A death cross sell signal (10-wk ma crossed below its 30-wk ma) and the Sep '14 negative outside month pattern warrants a technical downgrade of TOT to Neutral. 54-55 or the prior breakout and the Oct '14 low is initial support.



United Parcel Service (UPS)

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First Second Third First Second Third 93.19-94.05 89 84-85 100-101 105-106 115

Technical rating Neutral Sector Industrials


Rationale: We remain optimistic on the longer-term outlook of this Transport name based on a rising uptrend over thepast five years. A convincing surge above the low-to-mid 90s confirms a new record high above the previous 2004 high of 89.11. Although the Sep ’13 positive outside month may help to contain future corrections; the 01/03/14, 10/10/14negative outside week patterns hints of additional consolidation. In addition, a potential broadening top pattern warns of a matured rally. Having said that, a successful breakout above 105-106 would warrant a technical upgrade.

US Bancorp (USB)

2010 2011 2012 2013 2014

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First Second Third First Second Third 38 +/- 2 34.5 31-32 43.92 50-51 55-56



Rationale: This Financial stock has recovered all of its losses incurred during the subprime crisis. A move above its pre-vious 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 mid-2014 highs. While we note the near-term relative underperformance of this stock to S&P 500 Index, we also give this stock a benefit of doubt that the primary uptrend will hold. A breakout above 43.92 or the Jun/July ’14 highs can extend the rally to the low-to-mid 50s. Initial support is 38 +/- 2 or the Oct '13/Feb '14 lows.



Visa Inc Cl A (V)

2010 2011 2012 2013 2014

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First Second Third First Second Third 194.84 190 184-185 207-208.50 218-219 224 +/- 1

Technical rating Neutral Sector Technology

Last Sale Price $203

Rationale: A solid 380%+ rally from 2008 lows broadly sum up the optimism surrounding this stock. The stock wit-nessed an explosive rally from an absolute price and relative basis over the past 4+ years. However, the stock began toconsolidate from mid-230s or near the Jan ’14 highs. A negative outside month in Mar ’14 and a death cross sell signal (10-week ma crossing below 30-week ma) in May ‘14 further suggests a consolidation is likely to persist for a while longer and hence our Neutral technical stance. Initial support now lies near 194.84 corresponding to the Apr ’14 low.

Vodafone Group PLC ADS (VOD)

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First Second Third First Second Third

28.96 27.49 24.84 32 35 +/- 0.50 39 +/- 0.5



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 25 +/- 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 2007 highs (near 41.58), an overbought condition developed. A violation of 2013 uptrend and the rolling of the 10-/30-week ma as well as deteriorating relative strength (versus S&P 500) suggest a Neutral to defensive technical outlook.



Verizon Communications Inc. (VZ)

2010 2011 2012 2013 2014

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First Second Third First Second Third 45-46 40.50-41.50 35-37 51 +/- 0.50 53.66-54.31 57-59



Rationale: Although, a multi-year breakout above 2007 highs or 43.01 in late-2012/early-2013 is still constructive, the negative outside week patterns during 1/10/2014, 4/11/14, 4/25/14, 6/6/14, 8/1/14, 10/10/14 and relative underper-formance of the stock warn us of increasing weakness. A recent positive outside week pattern on 7/4/14 and 7/11/14and a July ’14 positive outside month pattern are favorable. While we are encouraged about a recovery, the frequentmoving average crossovers suggest further technical work is necessary. Initial support is at 45-46 or near 2014 lows.

Walgreen Co. (WAG)

2010 2011 2012 2013 2014

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First Second Third First Second Third 57.75 54.86-55.27 51.60-53.76 65-66.50 71 +/- 1 76.39-78



Rationale: A 14% gap fall on 08/06/14 not only hurt the near-term bullish trend but has also led to a breakdown be-low its key moving averages. The question is whether this recent bearish action signals a top? Despite the near-term weakness, we remain cautiously optimistic on WAG as long as the stock retains its multi-year breakout in the low-50s. In addition, the Feb '14 positive outside month pattern can also provide downside protection. Given the improvednear-term risk-reward profile, we retain our technical Bullish view but recommend monitoring Dec '13 low at 54.86.



Wells Fargo & Co (WFC)

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First Second Third First Second Third 44.17-46.44 39.40-40.07 36-37 53-54 58-59 63-64



Rationale: A large ascending triangle and/or head and shoulders bottom pattern has developed over the past 4-plus years. This Financial name quickly rallied to resistance near its previous all-time highs of 44.68 established during Sep 2008. The sustainability of the stock above the Jun/Jul ‘13 highs has attracted new buyers. Longer term projections wellinto the high-50s is possible based on the 4-year symmetrical triangle breakout. In the near-term, 10/10/14 negative outside week pattern hints of a consolidation. Initial support is at 44.17-46.44 or near the Feb/Apr/Oct ‘14 lows.

Wal-Mart Stores Inc. (WMT)

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First Second Third First Second Third 70.25-71.50 67-68 59.5-61.5 79.37-81.37 84-85 88-90



Rationale: While we remain optimistic on WMT on a longer term basis due primarily to the completion of a 13-yearbreakout in 2012 along the mid-to-high 60s, 12/6/13, 5/16/14 and 6/13/14 negative outside week patterns have led to a trading range environment between low-70s and low-80s. Frequent moving average crossovers, relative underper-formance of the stock versus SPX and potential Oct '14 negative outside month pattern keeps us Neutral. Initial sup-port is 70.25-71.50 or the Oct '13 low. Initial supply is 79.37-81.37 or the Oct '14 and Nov/Dec '13 highs.



Exxon Mobil Corp (XOM)

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9090

100100



First Second Third First Second Third 84.79 82.83 77.13 95.33 100.43 104.61



Rationale: A breakout above 95-96 last year suggested the emergence of a leadership name within the Energy sector.That said, on a near-to-intermediate term basis, XOM has struggled to convincingly confirm a major breakout failing to follow through to establish new highs. In addition, a breakdown below its 4-plus year triangle pattern warrants a technical downgrade to Neutral technical view. While 6/27/14, 10/10/14 negative outside weeks and the Jul '14 nega-tive outside month pattern hint of further consolidation. A convincing surge above 104.61 helps to reassert uptrend.



Appendix

Description and Methodology This report provides technical analysis on a dynamic list of stocks that, we believe, are of a wide interest. Please note that technical views are highly variable and will change with market conditions. Accordingly, these rat-ings 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 Avg (DMA)

The percentage above or below the moving average (see Moving Average) is used to help measure an overbought or oversold condition and is a component of risk management. It is calculated by taking the difference between the group price and its 30-week moving average (see below), and then divid-ing 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 mov-ing 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 potential 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 security’s price will move with the market. A beta of less than 1 means the security will be less volatile than the market. A beta of greater than 1 implies that the security’s price will be more volatile than the market.

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 dramatic decline as inves-tors/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 governing a breakout.

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

Channel

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

Fibonacci Retracement Level A technical analysis term used to describe potential areas of support (price stops declining) or re-sistance (price stops rising) on the charts. After a strong rally or decline there is a tendency for a secu-rity 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.

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 tech-nical sign that suggests the market has turned in favor of the security.



Appendix

Term / Abbreviation Description / Definition

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 patterns that often appear on the charts – H/S top and H/S bottom. Both of these patterns often denote the process of a reversal either from a bullish or bearish trend. 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 favoring 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 secu-rity’s price over a set period of time. This tool is designed to smooth out a stock’s (or market’s) short-er-term fluctuations to provide a better picture of an underlying trend. Moving averages generally are used to measure momentum and define areas of possible support and resistance. Moving averages can be helpful as they emphasize the direction of the dominant or prevailing trend and also tend to smooth out price and volume fluctuations, or “noise,” giving the trader or investor a clearer picture of the security in question. Many moving averages exist.

MRA Market Return Assumption is defined as the one-year local market interest rate plus 5% (a proxy forthe equity risk premium and not a forecast).

Neckline Support/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 potential head-and-shoulders bottom or top pattern. When prices break through this neckline support level and continue falling after forming the right shoulder, it confirms a head-and-shoulders top formation. Conversely, neckline resistance is a trend line drawn across the tops of the left shoulder, the head and the right shoulder. When prices break above this neckline resistance level and keep on rising, it typically completes the head-and-shoulders bottom pattern.

Overbought A technical condition in which the price of a security has risen to such a degree that the price be-comes 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 “out-side” 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 sys-tem 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. Sym-metrical Triangle is considered to be a continuation pattern that often signals a period of consolida-tion in a trend followed by a resumption of the prior trend. It is formed by the convergence of a de-scending 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 bear-ish pattern. It is the opposite of the Ascending Triangle in that there is a flat trend line and a down-ward sloping downtrend line.



Appendix

Statement of RiskStock market returns are difficult to forecast because of fluctuations in the economy, investor psychology, geopoliticalconditions and other important variables.

Analyst certificationEach 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 reflect hisor her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directlyor indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.

Required Disclosures

For a complete set of required disclosures relating to the companies that are the subject of this report, please mail 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 (20 October 2014)3M Co. 4, 7, 9, 11, 12, 14, 16, 17; Altria Group Inc. 9, 11, 12, Amazon.com Inc. 9, 11, 12, Amgen Inc. 4, 7, 8, 9, 11,12, 14, 16, 17; Astrazeneca 5, 9, 11, 12, AT&T Inc. 4, 6, 7, 8, 9, 11, 12, 14, 16, 17; Bank of America 6, 7, 8, 9, 11, 12,14, 16, 17; Berkshire Hathaway Inc. 7, 12, 14, 15, BP 1, 4, 8, 12, 16, 17; Bristol-Myers Squibb Co. 4, 6, 7, 9, 11, 12,14, 16, 17; Campbell Soup Co. 4, 6, 7, 9, 11, 12, 14, 16, Caterpillar Inc. 6, 9, 11, 12, 14, 15, Celgene Corp. 5, 6, 7,8, 12, 14, CenturyLink Inc. 4, 6, 12, 14, 16, 17; Chevron 6, 9, 11, 12, 14, Citigroup 4, 6, 7, 8, 9, 11, 12, 14, 16, 17;ConocoPhillips 4, 7, 12, 14, Costco Wholesale Corp. 9, 11, 12, CSX Corp. 4, 9, 11, 12, 16, 17; CVS Health 9, 11, 12,Deere and Co. 9, 11, 12, 15, Diageo 8, 12, 16, 17; Dominion Resources 4, 6, 7, 8, 9, 11, 12, 14, 16, 17; Dow ChemicalCo. 6, 7, 9, 11, 12, 14, 15, Duke Energy 4, 9, 11, 12, 16, 17; E.I. DuPont de Nemours & Co. 4, 6, 7, 9, 11, 12, 14, 15,EOG Resources 4, 9, 11, 12, 16, 17; Exxon Mobil 6, 9, 11, 12, 14, Facebook 12, Ford Motor Co 4, 7, 12, 14, FranklinResources 6, 7, 9, 11, 12, 14, General Mills Inc. 6, 9, 11, 12, 14, Gilead Sciences Inc. 12, GlaxoSmithKline Plc 8, 12, 16,Home Depot Inc. 9, 11, 12, Honeywell International Inc. 6, 9, 11, 12, 14, Illinois Tool Works Inc. 3, 5, 12, Intl BusinessMachines 4, 6, 7, 9, 11, 12, 13, 14, Johnson and Johnson 4, 6, 8, 9, 11, 12, 14, 16, Kimberly-Clark Corp. 9, 11, 12, LBrands 4, 12, 16, 17; McDonald's Corp. 9, 11, 12, McGraw-Hill Cos. 9, 11, 12, 17; Nestle SA/AG 8, 9, 11, 15, 16, 17;NextEra Energy Inc. 4, 12, 16, 17; Novartis 4, 5, 8, 10, 12, 15, 16, 17; Occidental Petroleum 4, 5, 8, 12, Oracle Corp.6, 9, 11, 12, 14, PepsiCo Inc. 4, 6, 7, 8, 9, 11, 12, 14, 16, 17; Pfizer Inc. 6, 9, 11, 12, 14, Philip Morris Intl Inc. 4, 8, 9,11, 12, 16, 17; Procter & Gamble Co. 4, 7, 9, 11, 12, 14, 16, Royal Dutch Shell Plc 4, 8, 12, St. Jude Medical Inc. 12,Starbucks Corp. 7, 12, 14, Target Corp. 12, Teva Pharmaceuticals Ltd. 5, 12, Total SA 8, 12, 16, 17; U.S. Bancorp 4, 6,8, 9, 11, 12, 14, 16, 17; United Parcel Service Inc. 6, 7, 8, 9, 11, 12, 14, 16, Verizon Communications Inc. 4, 9, 11, 12,16, 17; Vodafone Group 1, 2, 8, 12, 16, Walgreen Co. 9, 11, 12, Wal-Mart Stores Inc. 4, 6, 7, 9, 11, 12, 14, 16, WaltDisney Co. 9, 11, 12, 15, Wells Fargo 4, 6, 7, 8, 9, 11, 12, 14, 15, 16, 17;

1. UBS Limited acts as broker to this company.2. UBS Limited is acting as agent on Vodafone Group Plc's announced share buyback programme.3. UBS Securities LLC is a named advisor to Clayton, Dubilier & Rice for its announced agreement to acquire WilsonartInternational from Illinois Tool Works and is also providing financing.4. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment bankingservices are being, or have been, provided.5. 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).6. 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.7. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities servicesare being, or have been, provided.8. 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.9. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non-investmentbanking securities-related services are being, or have been, provided.10. UBS AG is acting as agent in regard to Novartis AG's announced share buyback programme.11. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services otherthan investment banking services from this company.



Appendix

12. UBS Securities LLC makes a market in the securities and/or ADRs of this company.13. An employee of UBS AG is an officer, director, or advisory board member of this company.14. Within the past 12 months, UBS Securities LLC has received compensation for products and services other thaninvestment banking services from this company/entity.15. 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.16. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment bankingservices from this company/entity.17. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securitiesof this company/entity or one of its affiliates within the past 12 months.CIO Wealth Management Research stock recommendation systemAnalysts provide a relative rating, which is based on the stock’s total return potential against the total estimated returnof the appropriate sector benchmark over the next 12 months.

Industry sector relative stock view systemOutperform (OUT) Expected to outperform the sector benchmark over the next 12 months.Marketperform (MKT) Expected to perform in line with the sector benchmark over the next 12 months.Underperform (UND) Expected to underperform the sector benchmark over the next 12 months.Under reviewUpon special events that require further analysis, the stock rating may be flagged as “Under review” by the analyst.SuspendedAn outperform or underperform rating may be suspended when the stock's performance materially diverges from theperformance of its respective benchmark.RestrictedIssuing of research on a company by WMR can be restricted due to legal, regulatory, contractual or best business practiceobligations which are normally caused by UBS Investment Bank’s involvement in an investment banking transaction inregard to the concerned company.

Technical Research Rating DefinitionsRating 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.



Appendix

Disclaimer

In certain countries UBS AG is referred to as UBS SA. This publication is for our clients’ information only and is not intended as an offer, ora solicitation of an offer, to buy or sell any investment or other specific product. It does not constitute a personal recommendation or takeinto account the particular investment objectives, financial situation and needs of any specific recipient. We recommend that recipients takefinancial and/or tax advice as to the implications of investing in any of the products mentioned herein. We do not provide tax advice. The analysiscontained herein is based 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 sources believed to be reliableand in good faith, but no representation or warranty, express or implied, is made as to its accuracy or completeness. 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