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 2.77% per annum.
- LOW price at the close of April 25, 2024 was $229.96 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 74.71% per annum.
- LOW price at the close of April 25, 2024 was lower than the bottom border of the secondary price channel by $8.80 (3.69%). This indicates a possible reversal in the secondary trend direction.
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 LOW 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 25, 2021
End date: February 22, 2024
a = 5.2099
b = 0.0001
s = 0.0824
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 2.77%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0824) – 1
= 39.02%
March 25, 2021 calculations
Top border of price channel:
Exp(Y482)
= Exp(a + b × X482 + 2 × s)
= Exp(a + b × 699 + 2 × s)
= Exp(5.2099 + 0.0001 × 699 + 2 × 0.0824)
= Exp(5.4270)
= $227.46
Bottom border of price channel:
Exp(Y482)
= Exp(a + b × X482 – 2 × s)
= Exp(a + b × 699 – 2 × s)
= Exp(5.2099 + 0.0001 × 699 – 2 × 0.0824)
= Exp(5.0976)
= $163.62
February 22, 2024 calculations
Top border of price channel:
Exp(Y1,214)
= Exp(a + b × X1,214 + 2 × s)
= Exp(a + b × 1,763 + 2 × s)
= Exp(5.2099 + 0.0001 × 1,763 + 2 × 0.0824)
= Exp(5.5068)
= $246.36
Bottom border of price channel:
Exp(Y1,214)
= Exp(a + b × X1,214 – 2 × s)
= Exp(a + b × 1,763 – 2 × s)
= Exp(5.2099 + 0.0001 × 1,763 – 2 × 0.0824)
= Exp(5.1773)
= $177.21
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 2.77% per annum.
- LOW price at the close of April 25, 2024 was $229.96 and was inside the primary price channel.
Secondary Trend
Start date: October 3, 2023
End date: April 9, 2024
a = 2.7496
b = 0.0015
s = 0.0327
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 74.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0327) – 1
= 13.96%
October 3, 2023 calculations
Top border of price channel:
Exp(Y1,117)
= Exp(a + b × X1,117 + 2 × s)
= Exp(a + b × 1,621 + 2 × s)
= Exp(2.7496 + 0.0015 × 1,621 + 2 × 0.0327)
= Exp(5.2928)
= $198.89
Bottom border of price channel:
Exp(Y1,117)
= Exp(a + b × X1,117 – 2 × s)
= Exp(a + b × 1,621 – 2 × s)
= Exp(2.7496 + 0.0015 × 1,621 – 2 × 0.0327)
= Exp(5.1621)
= $174.53
April 9, 2024 calculations
Top border of price channel:
Exp(Y1,246)
= Exp(a + b × X1,246 + 2 × s)
= Exp(a + b × 1,810 + 2 × s)
= Exp(2.7496 + 0.0015 × 1,810 + 2 × 0.0327)
= Exp(5.5817)
= $265.51
Bottom border of price channel:
Exp(Y1,246)
= Exp(a + b × X1,246 – 2 × s)
= Exp(a + b × 1,810 – 2 × s)
= Exp(2.7496 + 0.0015 × 1,810 – 2 × 0.0327)
= Exp(5.4510)
= $232.99
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 74.71% per annum.
- LOW price at the close of April 25, 2024 was lower than the bottom border of the secondary price channel by $8.80 (3.69%). This indicates a possible reversal in the secondary trend direction.
- Discover a new approach to trend analysis.
- Check the power of mathematical statistics.
- Price channels have never been so accurately estimated.
Check out LOW and 1,499 other stocks on our new website