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 2.68% per annum.
- KO price at the close of April 26, 2024 was $61.74 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 18.97% per annum.
- KO 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 KO 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: January 4, 2022
End date: April 23, 2024
a = 4.2087
b = -0.0001
s = 0.0381
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -2.68%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0381) – 1
= 16.47%
January 4, 2022 calculations
Top border of price channel:
Exp(Y678)
= Exp(a + b × X678 + 2 × s)
= Exp(a + b × 981 + 2 × s)
= Exp(4.2087 + -0.0001 × 981 + 2 × 0.0381)
= Exp(4.2119)
= $67.49
Bottom border of price channel:
Exp(Y678)
= Exp(a + b × X678 – 2 × s)
= Exp(a + b × 981 – 2 × s)
= Exp(4.2087 + -0.0001 × 981 – 2 × 0.0381)
= Exp(4.0595)
= $57.94
April 23, 2024 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(4.2087 + -0.0001 × 1,821 + 2 × 0.0381)
= Exp(4.1494)
= $63.40
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(4.2087 + -0.0001 × 1,821 – 2 × 0.0381)
= Exp(3.9969)
= $54.43
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 2.68% per annum.
- KO price at the close of April 26, 2024 was $61.74 and was inside the primary price channel.
Secondary Trend
Start date: September 25, 2023
End date: April 26, 2024
a = 3.2516
b = 0.0005
s = 0.0224
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 18.97%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0224) – 1
= 9.38%
September 25, 2023 calculations
Top border of price channel:
Exp(Y1,110)
= Exp(a + b × X1,110 + 2 × s)
= Exp(a + b × 1,610 + 2 × s)
= Exp(3.2516 + 0.0005 × 1,610 + 2 × 0.0224)
= Exp(4.0627)
= $58.13
Bottom border of price channel:
Exp(Y1,110)
= Exp(a + b × X1,110 – 2 × s)
= Exp(a + b × 1,610 – 2 × s)
= Exp(3.2516 + 0.0005 × 1,610 – 2 × 0.0224)
= Exp(3.9730)
= $53.14
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(3.2516 + 0.0005 × 1,824 + 2 × 0.0224)
= Exp(4.1645)
= $64.36
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.2516 + 0.0005 × 1,824 – 2 × 0.0224)
= Exp(4.0748)
= $58.84
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 18.97% per annum.
- KO 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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