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 34.46% per annum.
- AMGN price at the close of May 3, 2024 was $311.29 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.71% per annum.
- AMGN price at the close of May 3, 2024 was higher than the top border of the secondary price channel by $34.97 (12.66%). This indicates a possible reversal in the secondary trend direction.
- 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 AMGN 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: February 16, 2023
End date: February 26, 2024
a = 4.2711
b = 0.0008
s = 0.0540
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 34.46%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0540) – 1
= 24.12%
February 16, 2023 calculations
Top border of price channel:
Exp(Y954)
= Exp(a + b × X954 + 2 × s)
= Exp(a + b × 1,382 + 2 × s)
= Exp(4.2711 + 0.0008 × 1,382 + 2 × 0.0540)
= Exp(5.5002)
= $244.73
Bottom border of price channel:
Exp(Y954)
= Exp(a + b × X954 – 2 × s)
= Exp(a + b × 1,382 – 2 × s)
= Exp(4.2711 + 0.0008 × 1,382 – 2 × 0.0540)
= Exp(5.2841)
= $197.17
February 26, 2024 calculations
Top border of price channel:
Exp(Y1,210)
= Exp(a + b × X1,210 + 2 × s)
= Exp(a + b × 1,757 + 2 × s)
= Exp(4.2711 + 0.0008 × 1,757 + 2 × 0.0540)
= Exp(5.8043)
= $331.74
Bottom border of price channel:
Exp(Y1,210)
= Exp(a + b × X1,210 – 2 × s)
= Exp(a + b × 1,757 – 2 × s)
= Exp(4.2711 + 0.0008 × 1,757 – 2 × 0.0540)
= Exp(5.5883)
= $267.27
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 34.46% per annum.
- AMGN price at the close of May 3, 2024 was $311.29 and was inside the primary price channel.
Secondary Trend
Start date: January 2, 2024
End date: April 26, 2024
a = 8.2602
b = -0.0015
s = 0.0292
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0015) – 1
= -41.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0292) – 1
= 12.37%
January 2, 2024 calculations
Top border of price channel:
Exp(Y1,173)
= Exp(a + b × X1,173 + 2 × s)
= Exp(a + b × 1,702 + 2 × s)
= Exp(8.2602 + -0.0015 × 1,702 + 2 × 0.0292)
= Exp(5.8019)
= $330.94
Bottom border of price channel:
Exp(Y1,173)
= Exp(a + b × X1,173 – 2 × s)
= Exp(a + b × 1,702 – 2 × s)
= Exp(8.2602 + -0.0015 × 1,702 – 2 × 0.0292)
= Exp(5.6853)
= $294.51
April 26, 2024 calculations
Top border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 + 2 × s)
= Exp(a + b × 1,817 + 2 × s)
= Exp(8.2602 + -0.0015 × 1,817 + 2 × 0.0292)
= Exp(5.6319)
= $279.19
Bottom border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 – 2 × s)
= Exp(a + b × 1,817 – 2 × s)
= Exp(8.2602 + -0.0015 × 1,817 – 2 × 0.0292)
= Exp(5.5153)
= $248.46
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.71% per annum.
- AMGN price at the close of May 3, 2024 was higher than the top border of the secondary price channel by $34.97 (12.66%). This indicates a possible reversal in the secondary trend direction.
- Discover a new approach to trend analysis.
- Check the power of mathematical statistics.
- Price channels have never been so accurately estimated.
Check out AMGN and 1,499 other stocks on our new website