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 82.26% per annum.
- ADBE price at the close of April 18, 2024 was $473.18 and was lower than the bottom border of the primary price channel by $164.22 (25.76%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 72.39% per annum.
- ADBE price at the close of April 18, 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 ADBE 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: February 14, 2024
a = 3.6004
b = 0.0016
s = 0.0705
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 82.26%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0705) – 1
= 32.59%
September 15, 2022 calculations
Top border of price channel:
Exp(Y858)
= Exp(a + b × X858 + 2 × s)
= Exp(a + b × 1,242 + 2 × s)
= Exp(3.6004 + 0.0016 × 1,242 + 2 × 0.0705)
= Exp(5.7840)
= $325.05
Bottom border of price channel:
Exp(Y858)
= Exp(a + b × X858 – 2 × s)
= Exp(a + b × 1,242 – 2 × s)
= Exp(3.6004 + 0.0016 × 1,242 – 2 × 0.0705)
= Exp(5.5019)
= $245.16
February 14, 2024 calculations
Top border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 + 2 × s)
= Exp(a + b × 1,759 + 2 × s)
= Exp(3.6004 + 0.0016 × 1,759 + 2 × 0.0705)
= Exp(6.6342)
= $760.67
Bottom border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 – 2 × s)
= Exp(a + b × 1,759 – 2 × s)
= Exp(3.6004 + 0.0016 × 1,759 – 2 × 0.0705)
= Exp(6.3521)
= $573.72
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 82.26% per annum.
- ADBE price at the close of April 18, 2024 was $473.18 and was lower than the bottom border of the primary price channel by $164.22 (25.76%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 24, 2024
End date: April 18, 2024
a = 12.5809
b = -0.0035
s = 0.0316
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0035) – 1
= -72.39%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0316) – 1
= 13.47%
January 24, 2024 calculations
Top border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 + 2 × s)
= Exp(a + b × 1,738 + 2 × s)
= Exp(12.5809 + -0.0035 × 1,738 + 2 × 0.0316)
= Exp(6.5163)
= $676.09
Bottom border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 – 2 × s)
= Exp(a + b × 1,738 – 2 × s)
= Exp(12.5809 + -0.0035 × 1,738 – 2 × 0.0316)
= Exp(6.3900)
= $595.83
April 18, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(12.5809 + -0.0035 × 1,823 + 2 × 0.0316)
= Exp(6.2166)
= $501.01
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(12.5809 + -0.0035 × 1,823 – 2 × 0.0316)
= Exp(6.0903)
= $441.54
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 72.39% per annum.
- ADBE price at the close of April 18, 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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