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 43.04% per annum.
- ETSY price at the close of November 3, 2022 was $100.03 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 99.55% per annum.
- ETSY price at the close of November 3, 2022 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 ETSY 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: January 12, 2021
End date: November 3, 2022
a = 7.3435
b = -0.0015
s = 0.2320
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0015) – 1
= -43.04%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.2320) – 1
= 152.91%
January 12, 2021 calculations
Top border of price channel:
Exp(Y800)
= Exp(a + b × X800 + 2 × s)
= Exp(a + b × 1,163 + 2 × s)
= Exp(7.3435 + -0.0015 × 1,163 + 2 × 0.2320)
= Exp(6.0143)
= $409.24
Bottom border of price channel:
Exp(Y800)
= Exp(a + b × X800 – 2 × s)
= Exp(a + b × 1,163 – 2 × s)
= Exp(7.3435 + -0.0015 × 1,163 – 2 × 0.2320)
= Exp(5.0864)
= $161.81
November 3, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(7.3435 + -0.0015 × 1,823 + 2 × 0.2320)
= Exp(4.9967)
= $147.92
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(7.3435 + -0.0015 × 1,823 – 2 × 0.2320)
= Exp(4.0688)
= $58.49
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 43.04% per annum.
- ETSY price at the close of November 3, 2022 was $100.03 and was inside the primary price channel.
Secondary Trend
Start date: May 6, 2022
End date: November 3, 2022
a = 1.2620
b = 0.0019
s = 0.1059
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 99.55%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1059) – 1
= 52.73%
May 6, 2022 calculations
Top border of price channel:
Exp(Y1,132)
= Exp(a + b × X1,132 + 2 × s)
= Exp(a + b × 1,642 + 2 × s)
= Exp(1.2620 + 0.0019 × 1,642 + 2 × 0.1059)
= Exp(4.5819)
= $97.70
Bottom border of price channel:
Exp(Y1,132)
= Exp(a + b × X1,132 – 2 × s)
= Exp(a + b × 1,642 – 2 × s)
= Exp(1.2620 + 0.0019 × 1,642 – 2 × 0.1059)
= Exp(4.1584)
= $63.97
November 3, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(1.2620 + 0.0019 × 1,823 + 2 × 0.1059)
= Exp(4.9245)
= $137.62
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(1.2620 + 0.0019 × 1,823 – 2 × 0.1059)
= Exp(4.5010)
= $90.11
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 99.55% per annum.
- ETSY price at the close of November 3, 2022 was inside the secondary price channel.
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