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 3.58% per annum.
- HON price at the close of April 25, 2024 was $193.02 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1.91% per annum.
- HON price at the close of April 25, 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 HON 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 13, 2020
End date: April 25, 2024
a = 5.4267
b = -0.0001
s = 0.0625
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.58%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0625) – 1
= 28.42%
November 13, 2020 calculations
Top border of price channel:
Exp(Y393)
= Exp(a + b × X393 + 2 × s)
= Exp(a + b × 567 + 2 × s)
= Exp(5.4267 + -0.0001 × 567 + 2 × 0.0625)
= Exp(5.4951)
= $243.51
Bottom border of price channel:
Exp(Y393)
= Exp(a + b × X393 – 2 × s)
= Exp(a + b × 567 – 2 × s)
= Exp(5.4267 + -0.0001 × 567 – 2 × 0.0625)
= Exp(5.2450)
= $189.62
April 25, 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(5.4267 + -0.0001 × 1,826 + 2 × 0.0625)
= Exp(5.3694)
= $214.74
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.4267 + -0.0001 × 1,826 – 2 × 0.0625)
= Exp(5.1193)
= $167.23
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 3.58% per annum.
- HON price at the close of April 25, 2024 was $193.02 and was inside the primary price channel.
Secondary Trend
Start date: February 3, 2022
End date: April 25, 2024
a = 5.1956
b = 0.0001
s = 0.0526
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 1.91%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0526) – 1
= 23.41%
February 3, 2022 calculations
Top border of price channel:
Exp(Y700)
= Exp(a + b × X700 + 2 × s)
= Exp(a + b × 1,014 + 2 × s)
= Exp(5.1956 + 0.0001 × 1,014 + 2 × 0.0526)
= Exp(5.3533)
= $211.31
Bottom border of price channel:
Exp(Y700)
= Exp(a + b × X700 – 2 × s)
= Exp(a + b × 1,014 – 2 × s)
= Exp(5.1956 + 0.0001 × 1,014 – 2 × 0.0526)
= Exp(5.1430)
= $171.23
April 25, 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(5.1956 + 0.0001 × 1,826 + 2 × 0.0526)
= Exp(5.3954)
= $220.40
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.1956 + 0.0001 × 1,826 – 2 × 0.0526)
= Exp(5.1851)
= $178.59
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1.91% per annum.
- HON price at the close of April 25, 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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