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 66.74% per annum.
- NOW price at the close of May 8, 2024 was $721.03 and was lower than the bottom border of the primary price channel by $12.15 (1.66%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.93% per annum.
- NOW 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 NOW 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 22, 2022
End date: April 17, 2024
a = 4.1563
b = 0.0014
s = 0.0583
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0014) – 1
= 66.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0583) – 1
= 26.24%
September 22, 2022 calculations
Top border of price channel:
Exp(Y850)
= Exp(a + b × X850 + 2 × s)
= Exp(a + b × 1,232 + 2 × s)
= Exp(4.1563 + 0.0014 × 1,232 + 2 × 0.0583)
= Exp(5.9984)
= $402.79
Bottom border of price channel:
Exp(Y850)
= Exp(a + b × X850 – 2 × s)
= Exp(a + b × 1,232 – 2 × s)
= Exp(4.1563 + 0.0014 × 1,232 – 2 × 0.0583)
= Exp(5.7654)
= $319.07
April 17, 2024 calculations
Top border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 + 2 × s)
= Exp(a + b × 1,805 + 2 × s)
= Exp(4.1563 + 0.0014 × 1,805 + 2 × 0.0583)
= Exp(6.8010)
= $898.75
Bottom border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 – 2 × s)
= Exp(a + b × 1,805 – 2 × s)
= Exp(4.1563 + 0.0014 × 1,805 – 2 × 0.0583)
= Exp(6.5680)
= $711.93
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 66.74% per annum.
- NOW price at the close of May 8, 2024 was $721.03 and was lower than the bottom border of the primary price channel by $12.15 (1.66%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 25, 2024
End date: May 8, 2024
a = 8.0905
b = -0.0008
s = 0.0246
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.93%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0246) – 1
= 10.32%
January 25, 2024 calculations
Top border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 + 2 × s)
= Exp(a + b × 1,722 + 2 × s)
= Exp(8.0905 + -0.0008 × 1,722 + 2 × 0.0246)
= Exp(6.7235)
= $831.73
Bottom border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 – 2 × s)
= Exp(a + b × 1,722 – 2 × s)
= Exp(8.0905 + -0.0008 × 1,722 – 2 × 0.0246)
= Exp(6.6253)
= $753.92
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(8.0905 + -0.0008 × 1,826 + 2 × 0.0246)
= Exp(6.6380)
= $763.56
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.0905 + -0.0008 × 1,826 – 2 × 0.0246)
= Exp(6.5398)
= $692.13
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.93% per annum.
- NOW 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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