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 360.22% per annum.
- SMCI price at the close of May 7, 2024 was $819.29 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 89.19% per annum.
- SMCI price at the close of May 7, 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 SMCI 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: March 28, 2022
End date: May 7, 2024
a = -1.0110
b = 0.0042
s = 0.2622
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0042) – 1
= 360.22%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.2622) – 1
= 185.41%
March 28, 2022 calculations
Top border of price channel:
Exp(Y728)
= Exp(a + b × X728 + 2 × s)
= Exp(a + b × 1,055 + 2 × s)
= Exp(-1.0110 + 0.0042 × 1,055 + 2 × 0.2622)
= Exp(3.9257)
= $50.69
Bottom border of price channel:
Exp(Y728)
= Exp(a + b × X728 – 2 × s)
= Exp(a + b × 1,055 – 2 × s)
= Exp(-1.0110 + 0.0042 × 1,055 – 2 × 0.2622)
= Exp(2.8769)
= $17.76
May 7, 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(-1.0110 + 0.0042 × 1,826 + 2 × 0.2622)
= Exp(7.1502)
= $1,274.42
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-1.0110 + 0.0042 × 1,826 – 2 × 0.2622)
= Exp(6.1015)
= $446.53
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 360.22% per annum.
- SMCI price at the close of May 7, 2024 was $819.29 and was inside the primary price channel.
Secondary Trend
Start date: March 4, 2024
End date: May 7, 2024
a = 17.7772
b = -0.0061
s = 0.0724
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0061) – 1
= -89.19%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0724) – 1
= 33.56%
March 4, 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(17.7772 + -0.0061 × 1,762 + 2 × 0.0724)
= Exp(7.1830)
= $1,316.88
Bottom border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 – 2 × s)
= Exp(a + b × 1,762 – 2 × s)
= Exp(17.7772 + -0.0061 × 1,762 – 2 × 0.0724)
= Exp(6.8936)
= $985.95
May 7, 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(17.7772 + -0.0061 × 1,826 + 2 × 0.0724)
= Exp(6.7930)
= $891.55
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(17.7772 + -0.0061 × 1,826 – 2 × 0.0724)
= Exp(6.5035)
= $667.50
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 89.19% per annum.
- SMCI price at the close of May 7, 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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