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 361.60% per annum.
- NVDA price at the close of April 25, 2024 was $826.32 and was lower than the bottom border of the primary price channel by $301.01 (26.70%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 159.46% per annum.
- NVDA price at the close of April 25, 2024 was inside the secondary price channel.
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 NVDA 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: September 1, 2022
End date: September 8, 2023
a = -0.4381
b = 0.0042
s = 0.0931
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0042) – 1
= 361.60%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0931) – 1
= 45.11%
September 1, 2022 calculations
Top border of price channel:
Exp(Y845)
= Exp(a + b × X845 + 2 × s)
= Exp(a + b × 1,224 + 2 × s)
= Exp(-0.4381 + 0.0042 × 1,224 + 2 × 0.0931)
= Exp(4.8772)
= $131.27
Bottom border of price channel:
Exp(Y845)
= Exp(a + b × X845 – 2 × s)
= Exp(a + b × 1,224 – 2 × s)
= Exp(-0.4381 + 0.0042 × 1,224 – 2 × 0.0931)
= Exp(4.5049)
= $90.46
September 8, 2023 calculations
Top border of price channel:
Exp(Y1,100)
= Exp(a + b × X1,100 + 2 × s)
= Exp(a + b × 1,596 + 2 × s)
= Exp(-0.4381 + 0.0042 × 1,596 + 2 × 0.0931)
= Exp(6.4361)
= $623.97
Bottom border of price channel:
Exp(Y1,100)
= Exp(a + b × X1,100 – 2 × s)
= Exp(a + b × 1,596 – 2 × s)
= Exp(-0.4381 + 0.0042 × 1,596 – 2 × 0.0931)
= Exp(6.0638)
= $430.00
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 361.60% per annum.
- NVDA price at the close of April 25, 2024 was $826.32 and was lower than the bottom border of the primary price channel by $301.01 (26.70%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: February 1, 2023
End date: February 21, 2024
a = 1.8809
b = 0.0026
s = 0.1186
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0026) – 1
= 159.46%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1186) – 1
= 60.73%
February 1, 2023 calculations
Top border of price channel:
Exp(Y949)
= Exp(a + b × X949 + 2 × s)
= Exp(a + b × 1,377 + 2 × s)
= Exp(1.8809 + 0.0026 × 1,377 + 2 × 0.1186)
= Exp(5.7150)
= $303.39
Bottom border of price channel:
Exp(Y949)
= Exp(a + b × X949 – 2 × s)
= Exp(a + b × 1,377 – 2 × s)
= Exp(1.8809 + 0.0026 × 1,377 – 2 × 0.1186)
= Exp(5.2405)
= $188.76
February 21, 2024 calculations
Top border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 + 2 × s)
= Exp(a + b × 1,762 + 2 × s)
= Exp(1.8809 + 0.0026 × 1,762 + 2 × 0.1186)
= Exp(6.7207)
= $829.39
Bottom border of price channel:
Exp(Y1,213)
= Exp(a + b × X1,213 – 2 × s)
= Exp(a + b × 1,762 – 2 × s)
= Exp(1.8809 + 0.0026 × 1,762 – 2 × 0.1186)
= Exp(6.2462)
= $516.03
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 159.46% per annum.
- NVDA 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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