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 187.19% per annum.
- NVDA price at the close of May 7, 2025 was $117.06 and was lower than the bottom border of the primary price channel by $60.16 (33.95%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 45.48% per annum.
- NVDA price at the close of May 7, 2025 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 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: June 13, 2022
End date: January 8, 2025
a = 0.2349
b = 0.0029
s = 0.1662
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0029) – 1
= 187.19%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1662) – 1
= 94.38%
June 13, 2022 calculations
Top border of price channel:
Exp(Y528)
= Exp(a + b × X528 + 2 × s)
= Exp(a + b × 766 + 2 × s)
= Exp(0.2349 + 0.0029 × 766 + 2 × 0.1662)
= Exp(2.7812)
= $16.14
Bottom border of price channel:
Exp(Y528)
= Exp(a + b × X528 – 2 × s)
= Exp(a + b × 766 – 2 × s)
= Exp(0.2349 + 0.0029 × 766 – 2 × 0.1662)
= Exp(2.1166)
= $8.30
January 8, 2025 calculations
Top border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 + 2 × s)
= Exp(a + b × 1,706 + 2 × s)
= Exp(0.2349 + 0.0029 × 1,706 + 2 × 0.1662)
= Exp(5.4981)
= $244.23
Bottom border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 – 2 × s)
= Exp(a + b × 1,706 – 2 × s)
= Exp(0.2349 + 0.0029 × 1,706 – 2 × 0.1662)
= Exp(4.8335)
= $125.65
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 187.19% per annum.
- NVDA price at the close of May 7, 2025 was $117.06 and was lower than the bottom border of the primary price channel by $60.16 (33.95%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 17, 2024
End date: May 7, 2025
a = 7.7114
b = -0.0017
s = 0.0626
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0017) – 1
= -45.48%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0626) – 1
= 28.45%
October 17, 2024 calculations
Top border of price channel:
Exp(Y1,118)
= Exp(a + b × X1,118 + 2 × s)
= Exp(a + b × 1,623 + 2 × s)
= Exp(7.7114 + -0.0017 × 1,623 + 2 × 0.0626)
= Exp(5.1389)
= $170.53
Bottom border of price channel:
Exp(Y1,118)
= Exp(a + b × X1,118 – 2 × s)
= Exp(a + b × 1,623 – 2 × s)
= Exp(7.7114 + -0.0017 × 1,623 – 2 × 0.0626)
= Exp(4.8885)
= $132.76
May 7, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(7.7114 + -0.0017 × 1,825 + 2 × 0.0626)
= Exp(4.8032)
= $121.90
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(7.7114 + -0.0017 × 1,825 – 2 × 0.0626)
= Exp(4.5528)
= $94.90
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 45.48% per annum.
- NVDA price at the close of May 7, 2025 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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