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 100.98% per annum.
- AVGO price at the close of April 19, 2024 was $1,204.71 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 166.79% per annum.
- AVGO price at the close of April 19, 2024 was lower than the bottom border of the secondary price channel by $101.87 (7.80%). 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 AVGO 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 20, 2022
End date: April 18, 2024
a = 3.7222
b = 0.0019
s = 0.0681
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 100.98%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0681) – 1
= 31.32%
September 20, 2022 calculations
Top border of price channel:
Exp(Y861)
= Exp(a + b × X861 + 2 × s)
= Exp(a + b × 1,247 + 2 × s)
= Exp(3.7222 + 0.0019 × 1,247 + 2 × 0.0681)
= Exp(6.2432)
= $514.53
Bottom border of price channel:
Exp(Y861)
= Exp(a + b × X861 – 2 × s)
= Exp(a + b × 1,247 – 2 × s)
= Exp(3.7222 + 0.0019 × 1,247 – 2 × 0.0681)
= Exp(5.9708)
= $391.82
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(3.7222 + 0.0019 × 1,823 + 2 × 0.0681)
= Exp(7.3448)
= $1,548.12
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(3.7222 + 0.0019 × 1,823 – 2 × 0.0681)
= Exp(7.0724)
= $1,178.94
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 100.98% per annum.
- AVGO price at the close of April 19, 2024 was $1,204.71 and was inside the primary price channel.
Secondary Trend
Start date: September 18, 2023
End date: April 18, 2024
a = 2.3713
b = 0.0027
s = 0.0499
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0027) – 1
= 166.79%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0499) – 1
= 22.10%
September 18, 2023 calculations
Top border of price channel:
Exp(Y1,110)
= Exp(a + b × X1,110 + 2 × s)
= Exp(a + b × 1,610 + 2 × s)
= Exp(2.3713 + 0.0027 × 1,610 + 2 × 0.0499)
= Exp(6.7995)
= $897.44
Bottom border of price channel:
Exp(Y1,110)
= Exp(a + b × X1,110 – 2 × s)
= Exp(a + b × 1,610 – 2 × s)
= Exp(2.3713 + 0.0027 × 1,610 – 2 × 0.0499)
= Exp(6.5998)
= $734.98
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(2.3713 + 0.0027 × 1,823 + 2 × 0.0499)
= Exp(7.3722)
= $1,591.11
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(2.3713 + 0.0027 × 1,823 – 2 × 0.0499)
= Exp(7.1725)
= $1,303.08
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 166.79% per annum.
- AVGO price at the close of April 19, 2024 was lower than the bottom border of the secondary price channel by $101.87 (7.80%). 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.
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