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 38.71% per annum.
- ISRG price at the close of April 25, 2024 was $373.12 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 111.52% per annum.
- ISRG price at the close of April 25, 2024 was lower than the bottom border of the secondary price channel by $2.96 (0.79%). This indicates a possible reversal in the secondary trend direction.
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 ISRG 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: May 9, 2022
End date: April 25, 2024
a = 4.3081
b = 0.0009
s = 0.0908
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 38.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0908) – 1
= 43.82%
May 9, 2022 calculations
Top border of price channel:
Exp(Y765)
= Exp(a + b × X765 + 2 × s)
= Exp(a + b × 1,109 + 2 × s)
= Exp(4.3081 + 0.0009 × 1,109 + 2 × 0.0908)
= Exp(5.4839)
= $240.79
Bottom border of price channel:
Exp(Y765)
= Exp(a + b × X765 – 2 × s)
= Exp(a + b × 1,109 – 2 × s)
= Exp(4.3081 + 0.0009 × 1,109 – 2 × 0.0908)
= Exp(5.1206)
= $167.43
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(4.3081 + 0.0009 × 1,826 + 2 × 0.0908)
= Exp(6.1267)
= $457.92
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.3081 + 0.0009 × 1,826 – 2 × 0.0908)
= Exp(5.7633)
= $318.40
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 38.71% per annum.
- ISRG price at the close of April 25, 2024 was $373.12 and was inside the primary price channel.
Secondary Trend
Start date: October 3, 2023
End date: April 25, 2024
a = 2.2931
b = 0.0021
s = 0.0555
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0021) – 1
= 111.52%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0555) – 1
= 24.87%
October 3, 2023 calculations
Top border of price channel:
Exp(Y1,117)
= Exp(a + b × X1,117 + 2 × s)
= Exp(a + b × 1,621 + 2 × s)
= Exp(2.2931 + 0.0021 × 1,621 + 2 × 0.0555)
= Exp(5.7311)
= $308.32
Bottom border of price channel:
Exp(Y1,117)
= Exp(a + b × X1,117 – 2 × s)
= Exp(a + b × 1,621 – 2 × s)
= Exp(2.2931 + 0.0021 × 1,621 – 2 × 0.0555)
= Exp(5.5091)
= $246.92
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(2.2931 + 0.0021 × 1,826 + 2 × 0.0555)
= Exp(6.1519)
= $469.60
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(2.2931 + 0.0021 × 1,826 – 2 × 0.0555)
= Exp(5.9298)
= $376.08
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 111.52% per annum.
- ISRG price at the close of April 25, 2024 was lower than the bottom border of the secondary price channel by $2.96 (0.79%). This indicates a possible reversal in the secondary trend direction.
- 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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