Technical Analysis of Large Cap Stocks January 2014
Upcoming SlideShare
Loading in...5
×
 

Technical Analysis of Large Cap Stocks January 2014

on

  • 225 views

Technical Analysis of Large Cap Stocks January 2014.

Technical Analysis of Large Cap Stocks January 2014.

Statistics

Views

Total Views
225
Views on SlideShare
225
Embed Views
0

Actions

Likes
0
Downloads
1
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Technical Analysis of Large Cap Stocks January 2014 Technical Analysis of Large Cap Stocks January 2014 Presentation Transcript

  • CIO WM Research January 17, 2014 Strictly Confidential For information about this report, see Description and Methodology in the Appendix. Technical Update of Selected Large Cap Stocks Peter Lee – Chief Technical Strategist This report has been prepared by UBS Financial Services Inc. ("UBS FS"). ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 11. 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.
  • S&P 500 Index (SPX) • Since the 2009 stock market bottom, three well defined uptrend channels have developed: the Mar 2009, the Oct 2011 and the Jun 2013 uptrend channel. • Each of the subsequent uptrend channels are steeper and more advanced than the prior. This suggests more buyers but also imply a maturing rally. • The two prior uptrend channels have sustained for nearly 20 and 31 months, respectively. If this continues then the next major trend change may occur during the 2015-2016 timeframe. • The current Jun 2013 uptrend channel is confined to a trading range between 1,724 (key support) and 1,840 (key resistance). The height of the channel is 116 points. A break out above 1,840 renders upside to 1,956. On the other hand, a break down below 1,724 suggests downside to 1,608. Note the top of the pivotal May 2013 breakout is also trading at 1,600. • June 2013 Uptrend Channel Key initial support now moves up to 1,8061,815.52 or the Nov 2013 high, Jan 2014 low and 50-day moving average. Secondary support also rises to the Nov/Dec 2013 lows at 1,767.99-1,746.20. The 30-week/150-day moving average and the Jun 2013 uptrend at 1,722-1,733 remain key support. Top of channel = 1,840 Bottom of channel = 1,724 October 2011 Uptrend Channel Top of channel = 1,855 Bottom of channel = 1,624 March 2009 Uptrend Channel Top of channel = 1,806 Bottom of channel = 1,434 Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. 1
  • Apple Inc. (AAPL) • The 45% decline from 2012-2013 downturn led to an extreme oversold condition. The ability to find key support during the Apr/Jun 2013 pullbacks (385/389) or near the 50% retracement from 2009-2012 rally (392) solidified an important bottom. • The surge above its 38.2% retracement at 507 and a subsequent breakout above the 50% retracement at 545 in early Dec 2013 suggests a retest of the pivotal 61.8% retracement at 583. There is also formidable resistance along 560-570 coinciding with the extension of the 2009 uptrend as well as the Dec 2013 highs. • Despite the above resistance zone we are encouraged by the technical developments: Jun 2013 uptrend channel, cup and handle, improving relative strength, positive outside day (1/15/14) and the potential for a positive outside week (1/17/14). A breakout above 560-583 helps to extend the rally to 630 or to the top of the 6 month uptrend channel and the 76.4% retracement. The all time record high at 705.07 (Sep 2013) remains major intermediate term resistance. • Key initial support now moves up to as high as 530-540 or to the recent Jan 2014 lows and the 50-day ma. Secondary support also rises to 508-514. The 150-day/30-week ma at 494-498 is key intermediate term support . Testing key resistance 50% retracement = 392 61.8 % retracement = 317 Retracement back to 61.8% 76.4% retracement = 630 61.8 % retracement = 583 50% retracement = 545 38.2% retracement = 507 Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. 2
  • Exxon Mobil Corp. (XOM) 8-year breakout confirmed above 95-96 • A major technical breakout above 9596 late last year suggests XOM is emerging as a leadership name within the Energy sector. This 8-year breakout renders upside targets to as high as 135-136, longer term. • On an intermediate term basis, XOM has also completed a constructive technical base above 88. This breakout suggests upside to 115-116. Risk/reward profile is attractive as it relates to the 10 & 30 week moving averages. • The relative strength breakout against the Oil Index (XOI) coupled with a surge above the mid 90s is technically significant as this renders upside to 107-108, near term. • The risk/reward profile is attractive. On the downside, the 1-week moving average (97) as well as the prior breakout at 95-96 is key initial support. The 30-week moving average (92) and the 2010 uptrend (91) is secondary support and the 2013 lows at 84.70-84.70 is key intermediate term support. Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. 3
  • Johnson & Johnson (JNJ) Ascending Triangle Breakout above 70-73 suggests upside to 113 • JNJ has finally broken out of its large ascending triangle pattern that dates back to the late 1990s (monthly chart). The break out above 70-73 completes a 40-point base and renders longer term target to 113. • On an intermediate term basis, the head and shoulders bottom break out above neckline resistance at 70-73 (weekly chart) renders upside projection to 99-100. 72.76 Height = 40.25 46.25 32.51 Head and Shoulders Bottom break out above 70-73 renders upside to 99-100 Height = 26.51 46.25 Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. • Although the longer term technical target is to 113 or 19.5% from the current level (94.64), the intermediate term risk/reward profile is no longer attractive as the intermediate term projection is 4.5-55% away to 99-100. • We recommend moving up near term support to 92.75-93.5 or to the Jan 2014 upside gap and the 10-week ma. Secondary support also rises to 89.591 or to the 10-month and 30 week ma. The Jun/Oct 2013 lows at 82-85.5 offers additional support. The low to mid 70s or prior key breakout remains major support. 4
  • General Electric Co. (GE) 2000 Downtrend breakout? 26 2 Uptrend Channels from 2009 and 2011 Source: Thomson Reuters, UBS CIO WMR as of 4 October 2013. • GE has reversed its bearish 2000 downtrend via a break out above 26 in Oct 2013. This action signals the start of a more sustainable intermediate term recovery. Two uptrend channels have developed over the years. These channels will likely provide key supports and resistances. The first uptrend channel from 2009 is between 21 and 31. The second uptrend channel from 2011 is between 23.5 and 28. • There is key near term resistance at 28-28.25 coinciding with the 61.8% retracement from 2007-2009 decline and the top of its 2011 uptrend channel. A break out here suggests next upside to 31 or to the top of its 2009 uptrend channel and then to 33.55 or the 76.4% retracement from 2007 to 2009 decline. The 2007 high (42) is longer term resistance. • On the downside, key initial support resides at 25/27 or the 10/30 week moving averages. 23.5/21 are key intermediate term supports. 5
  • Procter & Gamble Co. (PG) Nearing the top of the 13 year uptrend channel around 90 2009 uptrend breakout last year suggests upside to 83-84 Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. • An inflection point may be near as PG approach 88-90 or the top of its longterm uptrend channel (monthly chart). The outcome of this test may determine the next major trend. • The ability to convincingly surge above 88-90 is bullish as this action confirms a long-term uptrend channel dating back to the mid 1990s. This break out suggests 35 points rendering upside target to as high as 125, overtime. On the other hand, repeated failures to clear above 90 may also alert us to the start of an extensive consolidation phase. • Note that the 2009 uptrend channel break out early last year at 72 has led to a sharp rally to the technical projection of 83-84. It is interesting as PG traded into the mid 80s in Nov 2013, two negative outside weeks developed during 11/29/13 and 12/13/13. Failure to maintain the 30week ma (80.5) may trigger a correction to 73.61-75 or the Aug 2013 low and the extension of the top of the 2009 uptrend channel. 6
  • Google Inc. (GOOG) Technical Analysis Overview • The longer term trend (5 year technical outlook) remains positive but we are increasingly concerned about the overbought condition. Upside target to as high as 1,247-1,274 is likely to achieved sooner than later. The pivotal 2013 technical breakout above 747-752 is now major long-term support on a deep correction. • The intermediate term trend (1 year technical outlook) is also positive. An overbought condition still warns of a consolidation this year. The 1-year uptrend channel breakout above 1,068 renders an upside projection to 1,208 as early as the next few weeks. Key support is evident near the bottom of its uptrend channel and the rising 30-week moving average around 928-969. • The shorter term trend ( 1-3 months) also remains positive. The 10/18/13 upside gap suggests strong buying momentum. Our 1,208-1,247 target can be achieved as early as the first quarter 2014. Key near term support now rises to 1,078-1,095 or the top of the 1-year uptrend channel and 50-day moving average. Trend Outlook Support Resistance 1st Uptrend/Overbought 2nd 845-849 2nd 1,247 747-752 3rd 1,274 1,087-1,100 1st 1,208 Uptrend/Overbought 2nd 1,000 +/- 10 2nd 1,247 3rd 928-969 3rd 1,274 1st Short-term Technical View 1,208 1st 1 Year Technical View 1st 3rd 5 Year Technical View 928-956 1,078-1,095 1st 1,208 Uptrend/Overbought 2nd 961-974 2nd 1,247 3rd 921-928 3rd 1,274 7
  • Google (GOOG) – Long Term Technical View (5 years) • The multi-year relative strength breakout during the 1st/2nd quarter 2013 reaffirms GOOG's relative out performance cycle against SPX and the S&P Technology sector. A large ascending triangle pattern breakout above 747-774 during early 2013 still renders technical targets to 1,247-1,274, longer term. Based on the recent strong price momentum and the continued strength of the broad stock market rally we believe GOOG may soon achieve its longterm target as early as the 1st quarter 2014. • A bullish 3 year channel breakout above 680-690 during mid 2012 has already surpassed our intermediate term technical projection of 879-899. A new and steep uptrend channel has developed over the past year. Recent breakout above 1,068 in mid Dec 2013 now suggests 140 points rally or a technical target of 1,208, near term. • Although higher prices are possible, longer term, we are increasingly concerned about the extent of the recent rally. Key initial support now moves up to the extension of the top of 1-year channel and the 10-week ma at 1,087-1,095. The 10-month ma (956) and the bottom of the 1-year uptrend channel (928) offers secondary support. The Jun/Aug/Oct 2013 lows (845-849) provides additional support. The prior 2013 major breakout and the 30-mo ma at 747-752 can 8 act as major support. Two Bullish Ascending Triangle Breakouts 1,068 928 774.38 747.24 Height = 209.33 670.25 Height = 499.94 564 473.02 247.30 Relative Strength Breakout Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014.
  • Google Inc. (GOOG) – Intermediate Technical View (1 year) 1-year Uptrend Channel Breakout above 1,068 renders upside to 1,208. Height = 168 • The 10/18/13 daily upside gap formation ignited an impressive year end rally. This rally has now extended into the New Year. The relative strength breakout late last year also in Oct 2013 confirms higher prices. The 1-year uptrend channel breakout above 1,068 suggests next upside target to 1,208 possibly as early as the first quarter 2014. • Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. Given the Oct 2013 to present 36% plus rally it is reasonable to expect a normal consolidation to occur this year. We believe this correction helps to alleviate an overbought condition and prevent a speculative condition from developing. • Key initial support is at 1,087-1,100 or the top of a 1-year uptrend channel and the 10-week moving average. Secondary support is visible along 1,000 +/- 10 or the Nov 2013 lows. Key intermediate term support is evident at 928-969 or the bottom of the uptrend channel and 30-week moving average. 9
  • Google Inc. (GOOG) – Short term Technical View (1-3 months) Oct 2013 upside gap breakout (above 920.60) has achieved its price target of 998. An overbought condition suggests traders need to monitor trading risks. 920.60 Height = 77.62 842.98 • The large 10/18/13 upside gap breakout of nearly 77.62 point technical base has led to a sharp rally that exceeded our price target of 998. Although the Dec 2013 1-year uptrend channel breakout above 1,068 still suggests upside targets to 1,208 and then to 1,247-1,274 we believe the near-term risk/reward profile is no longer attractive. We recommend traders raise their risk parameters to protect trading gains. • Short term traders can use the top of the 1-year uptrend channel (1,095) and the 50-day ma (1,078) as key initial trading support. • Intermediate term traders can utilize the secondary support residing along the top of its 10/18/13 upside gap (974) and the 150-day ma (961). Source: Thomson Reuters, UBS CIO WMR as of 17 January 2014. • Patient traders can find key support residing near the summer 2013 highs (920.60), the bottom of the 2012 uptrend (928) and the bottom of the Oct 2013 upside gap (896.90). The Oct 2013 low (842.98) is a crucial reaction 10 low and hence pivotal support.
  • Appendix Statement of Risk Each research analyst primarily responsible for the content of this presentation, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this presentation: 1. All of the views expressed accurately reflect his or her personal views about those securities or issuers; and 2. No part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research presentation Required Disclosures Analyst Certification Each research analyst primarily responsible for the content of this presentation, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this presentation: 1. All of the views expressed accurately reflect his or her personal views about those securities or issuers; and 2. No part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research presentation. For a complete set of Required Disclosures relating to the companies that are the subject of this report, please mail a request to UBS Wealth Management Research Business Management, 1285 Avenue of the Americas, 13th Floor, New York, NY 10019. 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. 11
  • Appendix Required Disclosures Disclosures (17 January 2014) Apple Inc. 3, 4, 6, 7, 8, 9, 12; ExxonMobil Corp. 2, 5, 6, 7, 8, 9, 12; General Electric Co. 1, 2, 4, 5, 6, 7, 8, 9, 10, Google Inc 1, 2, 4, 6, 7, 8, 9, 10, 12; Johnson & Johnson 2, 5, 6, 7, 8, 9, Procter & Gamble 1, 2, 4, 6, 7, 8, 9, 10, 11, 1. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided. 2. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided. 3. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company's common equity securities as of last month's end (or the prior month's end if this report is dated less than 10 days after the most recent month's end). 4. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided. 5. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. 6. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non-investment banking securities-related services are being, or have been, provided. 7. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services other than investment banking services from this company. 8. UBS 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 than investment banking services from this company/entity. 10. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. 11. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months. 12. UBS AG, its affiliates or subsidiaries held other significant financial interests in this company/entity as of last month's end (or the prior month's end if this report is dated less than 10 working days after the most recent month's end). 12
  • Appendix Technical Research Ratings Definitions 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. Terms and Abbreviations Head-and-Shoulders Pattern This technical formation is one of the best known of the reversal patterns. There are two types of head-andshoulders 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 security’s price over a set period of time. This tool is designed to smooth out a stock’s (or market’s) shorter-term fluctuations to provide a better picture of an underlying trend. Moving averages generally are used to measure momentum and define areas of possible support and resistance. Moving averages can be helpful as they emphasize the direction of the dominant or prevailing trend and also tend to smooth out price and volume fluctuations, or “noise,” giving the trader or investor a clearer picture of the security in question. Many moving averages exist. 13
  • Appendix 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 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 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. 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. Support 14
  • Appendix 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 considered to be a continuation pattern that often signals a period of consolidation in a trend followed by a resumption of the prior trend. It is formed by the convergence of a descending trend and an ascending trend. An Ascending Triangle is a bullish pattern, which is denoted by two trend lines – a flat trend line and an ascending uptrend line. A Descending Triangle is a bearish pattern. It is the opposite of the Ascending Triangle in that there is a flat trend line and a downward sloping downtrend line. The percentage above or below the moving average (see Moving Average) is used to help measure an overbought or oversold condition and is a component of risk management. It is calculated by taking the difference between the group price and its 30-week moving average (see below), and then dividing by the 30-week moving average times 100. % +or- Moving Avg (DMA) 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. A chart pattern marking a period of accumulation following a downtrend. The larger the base, the greater the upside potential following its completion. A base can take many forms. A measure of volatility of a security as it relates to the market as a whole. Beta is often calculated using regression analysis. A beta is basically the tendency of a security’s returns to respond to swings in the market. A beta of 1 indicates that the security’s price will move with the market. A beta of less than 1 means the security will be less volatile than the market. A beta of greater than 1 implies that the security’s price will be more volatile than the market. Base Beta 15
  • Appendix 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 shortlived that often affords little opportunity for investors/traders to exit their positions. As price of a security or an asset advanced to an unsustainable level via a parabolic uptrend this give rise to the bursting of the speculative bubble resulting a quick and dramatic decline as investors/traders try to exit the market/security at the same time. 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 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. 16
  • Appendix Gap Golden Cross 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: exdividend gaps, new share issues, and expiration of futures contracts. A crossover on the chart that involves a security’s shorter-term moving average (such as the 50-day moving average) crossing above its longer-term moving average (such as the 150-day or 200-day moving average). Technicians often interpret this crossing of two moving averages as a bullish technical sign that suggests the market has turned in favor of the security. 17
  • 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, or a solicitation of an offer, to buy or sell any investment or other specific product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation and needs of any specific recipient. We recommend that recipients take financial and/or tax advice as to the implications of investing in any of the products mentioned herein. We do not provide tax advice. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. Other than disclosures relating to UBS AG, its subsidiaries and affiliates, all information expressed in this document were obtained from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to its accuracy or completeness. All information and opinions are current only as of the date of this report, and are subject to change without notice. This publication is not intended to be a complete statement or summary of the securities, markets or developments referred to in the report. Opinions may differ or be contrary to those expressed by other business areas or groups of UBS AG, its subsidiaries and affiliates. Chief Investment Office Wealth Management Research Americas (CIO WMRA) is written by Wealth Management & Swiss Bank and Wealth Management Americas. UBS Investment Research is written by UBS Investment Bank. The research process of Except for economic forecasts, CIO WMRA is independent of UBS Investment Research. As a consequence research methodologies applied and assumptions made by CIO WMRA 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 two UBS research organizations can be different. The analyst(s) responsible for the preparation of this report may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, synthesizing and interpreting market information. The compensation of the analyst(s) who prepared this report is determined exclusively by research management and senior management (not including investment banking). Analyst compensation is not based on investment banking revenues, however, compensation may relate to the revenues of UBS as a whole, of which investment banking, sales and trading are a part. At any time, investment decisions (including whether to buy or hold securities) made by UBS AG, its subsidiaries and employees thereof, may differ from or be contrary to the opinions expressed in UBS research publications. Some investments may not be readily realizable since the market in the securities is illiquid and therefore valuing the investment and identifying the risk to which you are exposed may be difficult to quantify. UBS relies on information barriers to control the flow of information contained in one or more areas within UBS, into other areas, units, groups or affiliates of UBS. Some investments may be subject to sudden and large falls in value and on realization you may receive back less than you invested or may be required to pay more. Changes in foreign currency exchange rates may have an adverse effect on the price, value or income of an investment. Past performance of an investment is not a guide to its future performance. Additional information will be made available upon request. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. Distributed to US persons by UBS Financial Services Inc., a subsidiary of UBS AG. UBS Securities LLC is a subsidiary of UBS AG and an affiliate of UBS Financial Services Inc. UBS Financial Services Inc. accepts responsibility for the content of a report prepared by a non-US affiliate when it distributes reports to US persons. All transactions by a US person in the securities mentioned in this report should be effected through a US-registered broker dealer affiliated with UBS, and not through a non-US affiliate. The contents of this report have not been and will not be approved by any securities or investment authority in the United States or elsewhere. Version as per September 2013. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. © 2014. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved 18