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 234.82% per annum.
- NVDA price at the close of May 8, 2024 was $904.12 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.31% per annum.
- NVDA 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 NVDA 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 1, 2022
End date: May 8, 2024
a = 0.8065
b = 0.0033
s = 0.1322
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0033) – 1
= 234.82%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1322) – 1
= 69.71%
September 1, 2022 calculations
Top border of price channel:
Exp(Y836)
= Exp(a + b × X836 + 2 × s)
= Exp(a + b × 1,211 + 2 × s)
= Exp(0.8065 + 0.0033 × 1,211 + 2 × 0.1322)
= Exp(5.0803)
= $160.82
Bottom border of price channel:
Exp(Y836)
= Exp(a + b × X836 – 2 × s)
= Exp(a + b × 1,211 – 2 × s)
= Exp(0.8065 + 0.0033 × 1,211 – 2 × 0.1322)
= Exp(4.5514)
= $94.76
May 8, 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(0.8065 + 0.0033 × 1,826 + 2 × 0.1322)
= Exp(7.1164)
= $1,232.05
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(0.8065 + 0.0033 × 1,826 – 2 × 0.1322)
= Exp(6.5875)
= $725.97
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 234.82% per annum.
- NVDA price at the close of May 8, 2024 was $904.12 and was inside the primary price channel.
Secondary Trend
Start date: March 5, 2024
End date: May 8, 2024
a = 8.3439
b = -0.0009
s = 0.0414
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -27.31%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0414) – 1
= 18.02%
March 5, 2024 calculations
Top border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 + 2 × s)
= Exp(a + b × 1,762 + 2 × s)
= Exp(8.3439 + -0.0009 × 1,762 + 2 × 0.0414)
= Exp(6.8872)
= $979.61
Bottom border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 – 2 × s)
= Exp(a + b × 1,762 – 2 × s)
= Exp(8.3439 + -0.0009 × 1,762 – 2 × 0.0414)
= Exp(6.7215)
= $830.07
May 8, 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(8.3439 + -0.0009 × 1,826 + 2 × 0.0414)
= Exp(6.8312)
= $926.34
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.3439 + -0.0009 × 1,826 – 2 × 0.0414)
= Exp(6.6656)
= $784.93
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.31% per annum.
- NVDA 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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