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 50.63% per annum.
- COST price at the close of April 24, 2024 was $723.89 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 28.29% per annum.
- COST price at the close of April 24, 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 COST 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: February 28, 2023
End date: April 24, 2024
a = 4.5568
b = 0.0011
s = 0.0407
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 50.63%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0407) – 1
= 17.67%
February 28, 2023 calculations
Top border of price channel:
Exp(Y968)
= Exp(a + b × X968 + 2 × s)
= Exp(a + b × 1,405 + 2 × s)
= Exp(4.5568 + 0.0011 × 1,405 + 2 × 0.0407)
= Exp(6.2152)
= $500.27
Bottom border of price channel:
Exp(Y968)
= Exp(a + b × X968 – 2 × s)
= Exp(a + b × 1,405 – 2 × s)
= Exp(4.5568 + 0.0011 × 1,405 – 2 × 0.0407)
= Exp(6.0524)
= $425.14
April 24, 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(4.5568 + 0.0011 × 1,826 + 2 × 0.0407)
= Exp(6.6877)
= $802.46
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.5568 + 0.0011 × 1,826 – 2 × 0.0407)
= Exp(6.5250)
= $681.95
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 50.63% per annum.
- COST price at the close of April 24, 2024 was $723.89 and was inside the primary price channel.
Secondary Trend
Start date: February 23, 2024
End date: April 24, 2024
a = 8.2302
b = -0.0009
s = 0.0171
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -28.29%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0171) – 1
= 7.06%
February 23, 2024 calculations
Top border of price channel:
Exp(Y1,216)
= Exp(a + b × X1,216 + 2 × s)
= Exp(a + b × 1,765 + 2 × s)
= Exp(8.2302 + -0.0009 × 1,765 + 2 × 0.0171)
= Exp(6.6562)
= $777.61
Bottom border of price channel:
Exp(Y1,216)
= Exp(a + b × X1,216 – 2 × s)
= Exp(a + b × 1,765 – 2 × s)
= Exp(8.2302 + -0.0009 × 1,765 – 2 × 0.0171)
= Exp(6.5880)
= $726.32
April 24, 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(8.2302 + -0.0009 × 1,826 + 2 × 0.0171)
= Exp(6.6006)
= $735.57
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.2302 + -0.0009 × 1,826 – 2 × 0.0171)
= Exp(6.5324)
= $687.06
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 28.29% per annum.
- COST price at the close of April 24, 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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