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 60.76% per annum.
- CRM price at the close of May 7, 2024 was $277.18 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 55.46% per annum.
- CRM price at the close of May 7, 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 CRM 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: September 15, 2022
End date: May 7, 2024
a = 3.3400
b = 0.0013
s = 0.0814
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 60.76%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0814) – 1
= 38.49%
September 15, 2022 calculations
Top border of price channel:
Exp(Y846)
= Exp(a + b × X846 + 2 × s)
= Exp(a + b × 1,226 + 2 × s)
= Exp(3.3400 + 0.0013 × 1,226 + 2 × 0.0814)
= Exp(5.0974)
= $163.59
Bottom border of price channel:
Exp(Y846)
= Exp(a + b × X846 – 2 × s)
= Exp(a + b × 1,226 – 2 × s)
= Exp(3.3400 + 0.0013 × 1,226 – 2 × 0.0814)
= Exp(4.7717)
= $118.12
May 7, 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(3.3400 + 0.0013 × 1,826 + 2 × 0.0814)
= Exp(5.8777)
= $356.99
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.3400 + 0.0013 × 1,826 – 2 × 0.0814)
= Exp(5.5521)
= $257.77
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 60.76% per annum.
- CRM price at the close of May 7, 2024 was $277.18 and was inside the primary price channel.
Secondary Trend
Start date: February 29, 2024
End date: May 7, 2024
a = 9.6503
b = -0.0022
s = 0.0261
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0022) – 1
= -55.46%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0261) – 1
= 11.00%
February 29, 2024 calculations
Top border of price channel:
Exp(Y1,211)
= Exp(a + b × X1,211 + 2 × s)
= Exp(a + b × 1,758 + 2 × s)
= Exp(9.6503 + -0.0022 × 1,758 + 2 × 0.0261)
= Exp(5.8066)
= $332.48
Bottom border of price channel:
Exp(Y1,211)
= Exp(a + b × X1,211 – 2 × s)
= Exp(a + b × 1,758 – 2 × s)
= Exp(9.6503 + -0.0022 × 1,758 – 2 × 0.0261)
= Exp(5.7022)
= $299.54
May 7, 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(9.6503 + -0.0022 × 1,826 + 2 × 0.0261)
= Exp(5.6559)
= $285.97
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.6503 + -0.0022 × 1,826 – 2 × 0.0261)
= Exp(5.5515)
= $257.64
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 55.46% per annum.
- CRM price at the close of May 7, 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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