Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 82.26% per annum.
- ADBE price at the close of May 13, 2024 was $483.11 and was lower than the bottom border of the primary price channel by $181.04 (27.26%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 46.54% per annum.
- ADBE price at the close of May 13, 2024 was inside the secondary price channel.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of ADBE price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: September 15, 2022
End date: February 14, 2024
a = 3.6366
b = 0.0016
s = 0.0705
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 82.26%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0705) – 1
= 32.59%
September 15, 2022 calculations
Top border of price channel:
Exp(Y842)
= Exp(a + b × X842 + 2 × s)
= Exp(a + b × 1,220 + 2 × s)
= Exp(3.6366 + 0.0016 × 1,220 + 2 × 0.0705)
= Exp(5.7840)
= $325.05
Bottom border of price channel:
Exp(Y842)
= Exp(a + b × X842 – 2 × s)
= Exp(a + b × 1,220 – 2 × s)
= Exp(3.6366 + 0.0016 × 1,220 – 2 × 0.0705)
= Exp(5.5019)
= $245.16
February 14, 2024 calculations
Top border of price channel:
Exp(Y1,197)
= Exp(a + b × X1,197 + 2 × s)
= Exp(a + b × 1,737 + 2 × s)
= Exp(3.6366 + 0.0016 × 1,737 + 2 × 0.0705)
= Exp(6.6342)
= $760.67
Bottom border of price channel:
Exp(Y1,197)
= Exp(a + b × X1,197 – 2 × s)
= Exp(a + b × 1,737 – 2 × s)
= Exp(3.6366 + 0.0016 × 1,737 – 2 × 0.0705)
= Exp(6.3521)
= $573.72
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 82.26% per annum.
- ADBE price at the close of May 13, 2024 was $483.11 and was lower than the bottom border of the primary price channel by $181.04 (27.26%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 16, 2023
End date: May 13, 2024
a = 9.3003
b = -0.0017
s = 0.0484
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0017) – 1
= -46.54%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0484) – 1
= 21.35%
November 16, 2023 calculations
Top border of price channel:
Exp(Y1,137)
= Exp(a + b × X1,137 + 2 × s)
= Exp(a + b × 1,647 + 2 × s)
= Exp(9.3003 + -0.0017 × 1,647 + 2 × 0.0484)
= Exp(6.5716)
= $714.48
Bottom border of price channel:
Exp(Y1,137)
= Exp(a + b × X1,137 – 2 × s)
= Exp(a + b × 1,647 – 2 × s)
= Exp(9.3003 + -0.0017 × 1,647 – 2 × 0.0484)
= Exp(6.3781)
= $588.80
May 13, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(9.3003 + -0.0017 × 1,826 + 2 × 0.0484)
= Exp(6.2645)
= $525.57
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.3003 + -0.0017 × 1,826 – 2 × 0.0484)
= Exp(6.0710)
= $433.12
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 46.54% per annum.
- ADBE price at the close of May 13, 2024 was inside the secondary price channel.
- Discover a new approach to trend analysis.
- Check the power of mathematical statistics.
- Price channels have never been so accurately estimated.
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