Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 28.07% per annum.
- CHTR price at the close of February 2, 2024 was $319.21 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 13.48% per annum.
- CHTR price at the close of February 2, 2024 was lower than the bottom border of the secondary price channel by $26.57 (7.69%). This indicates a possible reversal in the secondary trend direction.
- 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 CHTR 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: November 4, 2020
End date: July 19, 2023
a = 7.2644
b = -0.0009
s = 0.1371
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -28.07%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1371) – 1
= 73.07%
November 4, 2020 calculations
Top border of price channel:
Exp(Y443)
= Exp(a + b × X443 + 2 × s)
= Exp(a + b × 639 + 2 × s)
= Exp(7.2644 + -0.0009 × 639 + 2 × 0.1371)
= Exp(6.9618)
= $1,055.56
Bottom border of price channel:
Exp(Y443)
= Exp(a + b × X443 – 2 × s)
= Exp(a + b × 639 – 2 × s)
= Exp(7.2644 + -0.0009 × 639 – 2 × 0.1371)
= Exp(6.4133)
= $609.90
July 19, 2023 calculations
Top border of price channel:
Exp(Y1,121)
= Exp(a + b × X1,121 + 2 × s)
= Exp(a + b × 1,626 + 2 × s)
= Exp(7.2644 + -0.0009 × 1,626 + 2 × 0.1371)
= Exp(6.0709)
= $433.07
Bottom border of price channel:
Exp(Y1,121)
= Exp(a + b × X1,121 – 2 × s)
= Exp(a + b × 1,626 – 2 × s)
= Exp(7.2644 + -0.0009 × 1,626 – 2 × 0.1371)
= Exp(5.5224)
= $250.23
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 28.07% per annum.
- CHTR price at the close of February 2, 2024 was $319.21 and was inside the primary price channel.
Secondary Trend
Start date: September 14, 2022
End date: February 1, 2024
a = 5.3819
b = 0.0003
s = 0.0840
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 13.48%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0840) – 1
= 39.96%
September 14, 2022 calculations
Top border of price channel:
Exp(Y910)
= Exp(a + b × X910 + 2 × s)
= Exp(a + b × 1,318 + 2 × s)
= Exp(5.3819 + 0.0003 × 1,318 + 2 × 0.0840)
= Exp(6.0067)
= $406.13
Bottom border of price channel:
Exp(Y910)
= Exp(a + b × X910 – 2 × s)
= Exp(a + b × 1,318 – 2 × s)
= Exp(5.3819 + 0.0003 × 1,318 – 2 × 0.0840)
= Exp(5.6705)
= $290.18
February 1, 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(5.3819 + 0.0003 × 1,823 + 2 × 0.0840)
= Exp(6.1816)
= $483.79
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(5.3819 + 0.0003 × 1,823 – 2 × 0.0840)
= Exp(5.8455)
= $345.66
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 13.48% per annum.
- CHTR price at the close of February 2, 2024 was lower than the bottom border of the secondary price channel by $26.57 (7.69%). This indicates a possible reversal in the secondary trend direction.
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