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 47.67% per annum.
- CCL price at the close of May 8, 2024 was $14.30 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.56% per annum.
- CCL 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 CCL 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: June 13, 2022
End date: May 8, 2024
a = 0.9164
b = 0.0011
s = 0.1636
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 47.67%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1636) – 1
= 92.40%
June 13, 2022 calculations
Top border of price channel:
Exp(Y780)
= Exp(a + b × X780 + 2 × s)
= Exp(a + b × 1,131 + 2 × s)
= Exp(0.9164 + 0.0011 × 1,131 + 2 × 0.1636)
= Exp(2.4514)
= $11.60
Bottom border of price channel:
Exp(Y780)
= Exp(a + b × X780 – 2 × s)
= Exp(a + b × 1,131 – 2 × s)
= Exp(0.9164 + 0.0011 × 1,131 – 2 × 0.1636)
= Exp(1.7970)
= $6.03
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(0.9164 + 0.0011 × 1,826 + 2 × 0.1636)
= Exp(3.1936)
= $24.38
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(0.9164 + 0.0011 × 1,826 – 2 × 0.1636)
= Exp(2.5392)
= $12.67
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 47.67% per annum.
- CCL price at the close of May 8, 2024 was $14.30 and was inside the primary price channel.
Secondary Trend
Start date: December 6, 2023
End date: May 8, 2024
a = 5.3581
b = -0.0015
s = 0.0471
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0015) – 1
= -41.56%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0471) – 1
= 20.71%
December 6, 2023 calculations
Top border of price channel:
Exp(Y1,153)
= Exp(a + b × X1,153 + 2 × s)
= Exp(a + b × 1,672 + 2 × s)
= Exp(5.3581 + -0.0015 × 1,672 + 2 × 0.0471)
= Exp(2.9913)
= $19.91
Bottom border of price channel:
Exp(Y1,153)
= Exp(a + b × X1,153 – 2 × s)
= Exp(a + b × 1,672 – 2 × s)
= Exp(5.3581 + -0.0015 × 1,672 – 2 × 0.0471)
= Exp(2.8031)
= $16.50
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(5.3581 + -0.0015 × 1,826 + 2 × 0.0471)
= Exp(2.7647)
= $15.87
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.3581 + -0.0015 × 1,826 – 2 × 0.0471)
= Exp(2.5764)
= $13.15
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.56% per annum.
- CCL 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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