Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.09% per annum.
- TXN price at the close of May 3, 2024 was $178.91 and was higher than the top border of the primary price channel by $0.39 (0.22%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.91% per annum.
- TXN price at the close of May 3, 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 TXN 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 15, 2021
End date: April 23, 2024
a = 5.3353
b = -0.0001
s = 0.0552
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -5.09%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0552) – 1
= 24.71%
March 15, 2021 calculations
Top border of price channel:
Exp(Y468)
= Exp(a + b × X468 + 2 × s)
= Exp(a + b × 679 + 2 × s)
= Exp(5.3353 + -0.0001 × 679 + 2 × 0.0552)
= Exp(5.3486)
= $210.31
Bottom border of price channel:
Exp(Y468)
= Exp(a + b × X468 – 2 × s)
= Exp(a + b × 679 – 2 × s)
= Exp(5.3353 + -0.0001 × 679 – 2 × 0.0552)
= Exp(5.1277)
= $168.64
April 23, 2024 calculations
Top border of price channel:
Exp(Y1,250)
= Exp(a + b × X1,250 + 2 × s)
= Exp(a + b × 1,814 + 2 × s)
= Exp(5.3353 + -0.0001 × 1,814 + 2 × 0.0552)
= Exp(5.1861)
= $178.77
Bottom border of price channel:
Exp(Y1,250)
= Exp(a + b × X1,250 – 2 × s)
= Exp(a + b × 1,814 – 2 × s)
= Exp(5.3353 + -0.0001 × 1,814 – 2 × 0.0552)
= Exp(4.9653)
= $143.35
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.09% per annum.
- TXN price at the close of May 3, 2024 was $178.91 and was higher than the top border of the primary price channel by $0.39 (0.22%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 12, 2023
End date: May 3, 2024
a = 3.7473
b = 0.0008
s = 0.0362
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 32.91%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0362) – 1
= 15.58%
October 12, 2023 calculations
Top border of price channel:
Exp(Y1,118)
= Exp(a + b × X1,118 + 2 × s)
= Exp(a + b × 1,620 + 2 × s)
= Exp(3.7473 + 0.0008 × 1,620 + 2 × 0.0362)
= Exp(5.0824)
= $161.16
Bottom border of price channel:
Exp(Y1,118)
= Exp(a + b × X1,118 – 2 × s)
= Exp(a + b × 1,620 – 2 × s)
= Exp(3.7473 + 0.0008 × 1,620 – 2 × 0.0362)
= Exp(4.9376)
= $139.43
May 3, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(3.7473 + 0.0008 × 1,824 + 2 × 0.0362)
= Exp(5.2414)
= $188.94
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.7473 + 0.0008 × 1,824 – 2 × 0.0362)
= Exp(5.0966)
= $163.46
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.91% per annum.
- TXN price at the close of May 3, 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.
Check out TXN and 1,499 other stocks on our new website