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 12.98% per annum.
- CVX price at the close of April 26, 2024 was $165.89 and was higher than the top border of the primary price channel by $9.69 (6.20%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 28.83% per annum.
- CVX price at the close of April 26, 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 CVX 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 19, 2022
End date: March 13, 2024
a = 5.6613
b = -0.0004
s = 0.0422
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0004) – 1
= -12.98%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0422) – 1
= 18.40%
October 19, 2022 calculations
Top border of price channel:
Exp(Y877)
= Exp(a + b × X877 + 2 × s)
= Exp(a + b × 1,269 + 2 × s)
= Exp(5.6613 + -0.0004 × 1,269 + 2 × 0.0422)
= Exp(5.2625)
= $192.96
Bottom border of price channel:
Exp(Y877)
= Exp(a + b × X877 – 2 × s)
= Exp(a + b × 1,269 – 2 × s)
= Exp(5.6613 + -0.0004 × 1,269 – 2 × 0.0422)
= Exp(5.0936)
= $162.98
March 13, 2024 calculations
Top border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 + 2 × s)
= Exp(a + b × 1,780 + 2 × s)
= Exp(5.6613 + -0.0004 × 1,780 + 2 × 0.0422)
= Exp(5.0679)
= $158.84
Bottom border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 – 2 × s)
= Exp(a + b × 1,780 – 2 × s)
= Exp(5.6613 + -0.0004 × 1,780 – 2 × 0.0422)
= Exp(4.8990)
= $134.16
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 12.98% per annum.
- CVX price at the close of April 26, 2024 was $165.89 and was higher than the top border of the primary price channel by $9.69 (6.20%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 7, 2023
End date: April 26, 2024
a = 3.8091
b = 0.0007
s = 0.0204
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 28.83%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0204) – 1
= 8.49%
November 7, 2023 calculations
Top border of price channel:
Exp(Y1,141)
= Exp(a + b × X1,141 + 2 × s)
= Exp(a + b × 1,653 + 2 × s)
= Exp(3.8091 + 0.0007 × 1,653 + 2 × 0.0204)
= Exp(4.9972)
= $148.00
Bottom border of price channel:
Exp(Y1,141)
= Exp(a + b × X1,141 – 2 × s)
= Exp(a + b × 1,653 – 2 × s)
= Exp(3.8091 + 0.0007 × 1,653 – 2 × 0.0204)
= Exp(4.9157)
= $136.42
April 26, 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(3.8091 + 0.0007 × 1,824 + 2 × 0.0204)
= Exp(5.1159)
= $166.66
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.8091 + 0.0007 × 1,824 – 2 × 0.0204)
= Exp(5.0344)
= $153.61
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 28.83% per annum.
- CVX price at the close of April 26, 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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