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 7.74% per annum.
- FSLR price at the close of October 29, 2024 was $199.67 and was higher than the top border of the primary price channel by $2.64 (1.34%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 79.07% per annum.
- FSLR price at the close of October 29, 2024 was lower than the bottom border of the secondary price channel by $3.95 (1.94%). 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 FSLR 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: October 31, 2022
End date: May 2, 2024
a = 5.4484
b = -0.0002
s = 0.1191
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -7.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1191) – 1
= 61.01%
October 31, 2022 calculations
Top border of price channel:
Exp(Y756)
= Exp(a + b × X756 + 2 × s)
= Exp(a + b × 1,097 + 2 × s)
= Exp(5.4484 + -0.0002 × 1,097 + 2 × 0.1191)
= Exp(5.4443)
= $231.44
Bottom border of price channel:
Exp(Y756)
= Exp(a + b × X756 – 2 × s)
= Exp(a + b × 1,097 – 2 × s)
= Exp(5.4484 + -0.0002 × 1,097 – 2 × 0.1191)
= Exp(4.9680)
= $143.74
May 2, 2024 calculations
Top border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 + 2 × s)
= Exp(a + b × 1,646 + 2 × s)
= Exp(5.4484 + -0.0002 × 1,646 + 2 × 0.1191)
= Exp(5.3231)
= $205.01
Bottom border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 – 2 × s)
= Exp(a + b × 1,646 – 2 × s)
= Exp(5.4484 + -0.0002 × 1,646 – 2 × 0.1191)
= Exp(4.8468)
= $127.33
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 7.74% per annum.
- FSLR price at the close of October 29, 2024 was $199.67 and was higher than the top border of the primary price channel by $2.64 (1.34%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: September 27, 2023
End date: October 9, 2024
a = 2.6360
b = 0.0016
s = 0.1172
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 79.07%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1172) – 1
= 59.81%
September 27, 2023 calculations
Top border of price channel:
Exp(Y983)
= Exp(a + b × X983 + 2 × s)
= Exp(a + b × 1,428 + 2 × s)
= Exp(2.6360 + 0.0016 × 1,428 + 2 × 0.1172)
= Exp(5.1498)
= $172.40
Bottom border of price channel:
Exp(Y983)
= Exp(a + b × X983 – 2 × s)
= Exp(a + b × 1,428 – 2 × s)
= Exp(2.6360 + 0.0016 × 1,428 – 2 × 0.1172)
= Exp(4.6810)
= $107.87
October 9, 2024 calculations
Top border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 + 2 × s)
= Exp(a + b × 1,806 + 2 × s)
= Exp(2.6360 + 0.0016 × 1,806 + 2 × 0.1172)
= Exp(5.7532)
= $315.18
Bottom border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 – 2 × s)
= Exp(a + b × 1,806 – 2 × s)
= Exp(2.6360 + 0.0016 × 1,806 – 2 × 0.1172)
= Exp(5.2843)
= $197.22
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 79.07% per annum.
- FSLR price at the close of October 29, 2024 was lower than the bottom border of the secondary price channel by $3.95 (1.94%). This indicates a possible reversal in the secondary trend direction.