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 51.97% per annum.
- INTU price at the close of May 8, 2024 was $632.43 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.12% per annum.
- INTU price at the close of May 8, 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 INTU 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: November 2, 2022
End date: April 12, 2024
a = 4.4281
b = 0.0011
s = 0.0459
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 51.97%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0459) – 1
= 20.14%
November 2, 2022 calculations
Top border of price channel:
Exp(Y879)
= Exp(a + b × X879 + 2 × s)
= Exp(a + b × 1,273 + 2 × s)
= Exp(4.4281 + 0.0011 × 1,273 + 2 × 0.0459)
= Exp(5.9796)
= $395.27
Bottom border of price channel:
Exp(Y879)
= Exp(a + b × X879 – 2 × s)
= Exp(a + b × 1,273 – 2 × s)
= Exp(4.4281 + 0.0011 × 1,273 – 2 × 0.0459)
= Exp(5.7961)
= $329.00
April 12, 2024 calculations
Top border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 + 2 × s)
= Exp(a + b × 1,800 + 2 × s)
= Exp(4.4281 + 0.0011 × 1,800 + 2 × 0.0459)
= Exp(6.5839)
= $723.34
Bottom border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 – 2 × s)
= Exp(a + b × 1,800 – 2 × s)
= Exp(4.4281 + 0.0011 × 1,800 – 2 × 0.0459)
= Exp(6.4004)
= $602.07
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 51.97% per annum.
- INTU price at the close of May 8, 2024 was $632.43 and was inside the primary price channel.
Secondary Trend
Start date: February 8, 2024
End date: May 3, 2024
a = 7.8707
b = -0.0008
s = 0.0173
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.12%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0173) – 1
= 7.17%
February 8, 2024 calculations
Top border of price channel:
Exp(Y1,196)
= Exp(a + b × X1,196 + 2 × s)
= Exp(a + b × 1,736 + 2 × s)
= Exp(7.8707 + -0.0008 × 1,736 + 2 × 0.0173)
= Exp(6.5296)
= $685.14
Bottom border of price channel:
Exp(Y1,196)
= Exp(a + b × X1,196 – 2 × s)
= Exp(a + b × 1,736 – 2 × s)
= Exp(7.8707 + -0.0008 × 1,736 – 2 × 0.0173)
= Exp(6.4603)
= $639.28
May 3, 2024 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(7.8707 + -0.0008 × 1,821 + 2 × 0.0173)
= Exp(6.4623)
= $640.51
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(7.8707 + -0.0008 × 1,821 – 2 × 0.0173)
= Exp(6.3930)
= $597.64
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.12% per annum.
- INTU price at the close of May 8, 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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