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 58.05% per annum.
- SNPS price at the close of April 26, 2024 was $543.66 and was lower than the bottom border of the primary price channel by $17.28 (3.08%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 74.54% per annum.
- SNPS price at the close of April 26, 2024 was higher than the top border of the secondary price channel by $2.33 (0.43%). This indicates a possible reversal in the secondary trend direction.
- 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 SNPS 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 21, 2022
End date: April 8, 2024
a = 4.1323
b = 0.0013
s = 0.0450
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 58.05%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0450) – 1
= 19.73%
September 21, 2022 calculations
Top border of price channel:
Exp(Y857)
= Exp(a + b × X857 + 2 × s)
= Exp(a + b × 1,241 + 2 × s)
= Exp(4.1323 + 0.0013 × 1,241 + 2 × 0.0450)
= Exp(5.7786)
= $323.30
Bottom border of price channel:
Exp(Y857)
= Exp(a + b × X857 – 2 × s)
= Exp(a + b × 1,241 – 2 × s)
= Exp(4.1323 + 0.0013 × 1,241 – 2 × 0.0450)
= Exp(5.5985)
= $270.03
April 8, 2024 calculations
Top border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 + 2 × s)
= Exp(a + b × 1,806 + 2 × s)
= Exp(4.1323 + 0.0013 × 1,806 + 2 × 0.0450)
= Exp(6.4871)
= $656.61
Bottom border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 – 2 × s)
= Exp(a + b × 1,806 – 2 × s)
= Exp(4.1323 + 0.0013 × 1,806 – 2 × 0.0450)
= Exp(6.3071)
= $548.43
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 58.05% per annum.
- SNPS price at the close of April 26, 2024 was $543.66 and was lower than the bottom border of the primary price channel by $17.28 (3.08%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 19, 2024
End date: April 25, 2024
a = 13.0914
b = -0.0037
s = 0.0195
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0037) – 1
= -74.54%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0195) – 1
= 8.10%
March 19, 2024 calculations
Top border of price channel:
Exp(Y1,231)
= Exp(a + b × X1,231 + 2 × s)
= Exp(a + b × 1,786 + 2 × s)
= Exp(13.0914 + -0.0037 × 1,786 + 2 × 0.0195)
= Exp(6.4364)
= $624.19
Bottom border of price channel:
Exp(Y1,231)
= Exp(a + b × X1,231 – 2 × s)
= Exp(a + b × 1,786 – 2 × s)
= Exp(13.0914 + -0.0037 × 1,786 – 2 × 0.0195)
= Exp(6.3585)
= $577.39
April 25, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(13.0914 + -0.0037 × 1,823 + 2 × 0.0195)
= Exp(6.2978)
= $543.36
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(13.0914 + -0.0037 × 1,823 – 2 × 0.0195)
= Exp(6.2198)
= $502.62
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 74.54% per annum.
- SNPS price at the close of April 26, 2024 was higher than the top border of the secondary price channel by $2.33 (0.43%). 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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