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 84.05% per annum.
- PANW price at the close of May 6, 2024 was $300.57 and was lower than the bottom border of the primary price channel by $11.38 (3.65%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 65.81% per annum.
- PANW price at the close of May 6, 2024 was higher than the top border of the secondary price channel by $10.44 (3.60%). 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 PANW 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: October 11, 2022
End date: February 20, 2024
a = 2.8625
b = 0.0017
s = 0.0857
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0017) – 1
= 84.05%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0857) – 1
= 40.90%
October 11, 2022 calculations
Top border of price channel:
Exp(Y865)
= Exp(a + b × X865 + 2 × s)
= Exp(a + b × 1,253 + 2 × s)
= Exp(2.8625 + 0.0017 × 1,253 + 2 × 0.0857)
= Exp(5.1281)
= $168.69
Bottom border of price channel:
Exp(Y865)
= Exp(a + b × X865 – 2 × s)
= Exp(a + b × 1,253 – 2 × s)
= Exp(2.8625 + 0.0017 × 1,253 – 2 × 0.0857)
= Exp(4.7852)
= $119.72
February 20, 2024 calculations
Top border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 + 2 × s)
= Exp(a + b × 1,750 + 2 × s)
= Exp(2.8625 + 0.0017 × 1,750 + 2 × 0.0857)
= Exp(5.9587)
= $387.11
Bottom border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 – 2 × s)
= Exp(a + b × 1,750 – 2 × s)
= Exp(2.8625 + 0.0017 × 1,750 – 2 × 0.0857)
= Exp(5.6158)
= $274.74
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 84.05% per annum.
- PANW price at the close of May 6, 2024 was $300.57 and was lower than the bottom border of the primary price channel by $11.38 (3.65%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 11, 2024
End date: April 22, 2024
a = 10.9058
b = -0.0029
s = 0.0672
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0029) – 1
= -65.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0672) – 1
= 30.83%
January 11, 2024 calculations
Top border of price channel:
Exp(Y1,179)
= Exp(a + b × X1,179 + 2 × s)
= Exp(a + b × 1,710 + 2 × s)
= Exp(10.9058 + -0.0029 × 1,710 + 2 × 0.0672)
= Exp(6.0115)
= $408.08
Bottom border of price channel:
Exp(Y1,179)
= Exp(a + b × X1,179 – 2 × s)
= Exp(a + b × 1,710 – 2 × s)
= Exp(10.9058 + -0.0029 × 1,710 – 2 × 0.0672)
= Exp(5.7428)
= $311.92
April 22, 2024 calculations
Top border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 + 2 × s)
= Exp(a + b × 1,812 + 2 × s)
= Exp(10.9058 + -0.0029 × 1,812 + 2 × 0.0672)
= Exp(5.7115)
= $302.33
Bottom border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 – 2 × s)
= Exp(a + b × 1,812 – 2 × s)
= Exp(10.9058 + -0.0029 × 1,812 – 2 × 0.0672)
= Exp(5.4428)
= $231.09
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 65.81% per annum.
- PANW price at the close of May 6, 2024 was higher than the top border of the secondary price channel by $10.44 (3.60%). 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.
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