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 19.12% per annum.
- WMT price at the close of April 26, 2024 was $60.16 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 65.20% per annum.
- WMT price at the close of April 26, 2024 was inside the secondary price channel.
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 WMT 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: May 17, 2022
End date: April 26, 2024
a = 3.2047
b = 0.0005
s = 0.0359
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 19.12%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0359) – 1
= 15.44%
May 17, 2022 calculations
Top border of price channel:
Exp(Y770)
= Exp(a + b × X770 + 2 × s)
= Exp(a + b × 1,114 + 2 × s)
= Exp(3.2047 + 0.0005 × 1,114 + 2 × 0.0359)
= Exp(3.8105)
= $45.17
Bottom border of price channel:
Exp(Y770)
= Exp(a + b × X770 – 2 × s)
= Exp(a + b × 1,114 – 2 × s)
= Exp(3.2047 + 0.0005 × 1,114 – 2 × 0.0359)
= Exp(3.6669)
= $39.13
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(3.2047 + 0.0005 × 1,824 + 2 × 0.0359)
= Exp(4.1508)
= $63.48
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.2047 + 0.0005 × 1,824 – 2 × 0.0359)
= Exp(4.0072)
= $54.99
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 19.12% per annum.
- WMT price at the close of April 26, 2024 was $60.16 and was inside the primary price channel.
Secondary Trend
Start date: November 29, 2023
End date: April 26, 2024
a = 1.6247
b = 0.0014
s = 0.0219
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0014) – 1
= 65.20%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0219) – 1
= 9.16%
November 29, 2023 calculations
Top border of price channel:
Exp(Y1,156)
= Exp(a + b × X1,156 + 2 × s)
= Exp(a + b × 1,675 + 2 × s)
= Exp(1.6247 + 0.0014 × 1,675 + 2 × 0.0219)
= Exp(3.9722)
= $53.10
Bottom border of price channel:
Exp(Y1,156)
= Exp(a + b × X1,156 – 2 × s)
= Exp(a + b × 1,675 – 2 × s)
= Exp(1.6247 + 0.0014 × 1,675 – 2 × 0.0219)
= Exp(3.8845)
= $48.64
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(1.6247 + 0.0014 × 1,824 + 2 × 0.0219)
= Exp(4.1771)
= $65.18
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(1.6247 + 0.0014 × 1,824 – 2 × 0.0219)
= Exp(4.0894)
= $59.71
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 65.20% per annum.
- WMT 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.
Check out WMT and 1,499 other stocks on our new website