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 89.30% per annum.
- PANW price at the close of April 26, 2024 was $291.42 and was lower than the bottom border of the primary price channel by $22.67 (7.22%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 65.81% per annum.
- PANW price at the close of April 26, 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 PANW 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 2, 2022
End date: February 20, 2024
a = 2.7260
b = 0.0017
s = 0.0828
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0017) – 1
= 89.30%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0828) – 1
= 39.24%
November 2, 2022 calculations
Top border of price channel:
Exp(Y887)
= Exp(a + b × X887 + 2 × s)
= Exp(a + b × 1,283 + 2 × s)
= Exp(2.7260 + 0.0017 × 1,283 + 2 × 0.0828)
= Exp(5.1348)
= $169.83
Bottom border of price channel:
Exp(Y887)
= Exp(a + b × X887 – 2 × s)
= Exp(a + b × 1,283 – 2 × s)
= Exp(2.7260 + 0.0017 × 1,283 – 2 × 0.0828)
= Exp(4.8038)
= $121.97
February 20, 2024 calculations
Top border of price channel:
Exp(Y1,211)
= Exp(a + b × X1,211 + 2 × s)
= Exp(a + b × 1,758 + 2 × s)
= Exp(2.7260 + 0.0017 × 1,758 + 2 × 0.0828)
= Exp(5.9653)
= $389.67
Bottom border of price channel:
Exp(Y1,211)
= Exp(a + b × X1,211 – 2 × s)
= Exp(a + b × 1,758 – 2 × s)
= Exp(2.7260 + 0.0017 × 1,758 – 2 × 0.0828)
= Exp(5.6343)
= $279.86
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 89.30% per annum.
- PANW price at the close of April 26, 2024 was $291.42 and was lower than the bottom border of the primary price channel by $22.67 (7.22%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 11, 2024
End date: April 22, 2024
a = 10.9293
b = -0.0029
s = 0.0672
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0029) – 1
= -65.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0672) – 1
= 30.83%
January 11, 2024 calculations
Top border of price channel:
Exp(Y1,185)
= Exp(a + b × X1,185 + 2 × s)
= Exp(a + b × 1,718 + 2 × s)
= Exp(10.9293 + -0.0029 × 1,718 + 2 × 0.0672)
= Exp(6.0115)
= $408.08
Bottom border of price channel:
Exp(Y1,185)
= Exp(a + b × X1,185 – 2 × s)
= Exp(a + b × 1,718 – 2 × s)
= Exp(10.9293 + -0.0029 × 1,718 – 2 × 0.0672)
= Exp(5.7428)
= $311.92
April 22, 2024 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,820 + 2 × s)
= Exp(10.9293 + -0.0029 × 1,820 + 2 × 0.0672)
= Exp(5.7115)
= $302.33
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,820 – 2 × s)
= Exp(10.9293 + -0.0029 × 1,820 – 2 × 0.0672)
= Exp(5.4428)
= $231.09
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 65.81% per annum.
- PANW price at the close of April 26, 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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