Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.34% per annum.
- TXN price at the close of March 27, 2024 was $172.87 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 41.43% per annum.
- TXN price at the close of March 27, 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 TXN 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: March 16, 2021
End date: March 26, 2024
a = 5.3489
b = -0.0002
s = 0.0552
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -5.34%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0552) – 1
= 24.70%
March 16, 2021 calculations
Top border of price channel:
Exp(Y495)
= Exp(a + b × X495 + 2 × s)
= Exp(a + b × 719 + 2 × s)
= Exp(5.3489 + -0.0002 × 719 + 2 × 0.0552)
= Exp(5.3512)
= $210.86
Bottom border of price channel:
Exp(Y495)
= Exp(a + b × X495 – 2 × s)
= Exp(a + b × 719 – 2 × s)
= Exp(5.3489 + -0.0002 × 719 – 2 × 0.0552)
= Exp(5.1305)
= $169.10
March 26, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(5.3489 + -0.0002 × 1,825 + 2 × 0.0552)
= Exp(5.1850)
= $178.57
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(5.3489 + -0.0002 × 1,825 – 2 × 0.0552)
= Exp(4.9643)
= $143.20
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.34% per annum.
- TXN price at the close of March 27, 2024 was $172.87 and was inside the primary price channel.
Secondary Trend
Start date: October 13, 2023
End date: March 27, 2024
a = 3.4235
b = 0.0009
s = 0.0359
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 41.43%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0359) – 1
= 15.43%
October 13, 2023 calculations
Top border of price channel:
Exp(Y1,145)
= Exp(a + b × X1,145 + 2 × s)
= Exp(a + b × 1,660 + 2 × s)
= Exp(3.4235 + 0.0009 × 1,660 + 2 × 0.0359)
= Exp(5.0718)
= $159.45
Bottom border of price channel:
Exp(Y1,145)
= Exp(a + b × X1,145 – 2 × s)
= Exp(a + b × 1,660 – 2 × s)
= Exp(3.4235 + 0.0009 × 1,660 – 2 × 0.0359)
= Exp(4.9283)
= $138.14
March 27, 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(3.4235 + 0.0009 × 1,826 + 2 × 0.0359)
= Exp(5.2294)
= $186.68
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.4235 + 0.0009 × 1,826 – 2 × 0.0359)
= Exp(5.0859)
= $161.73
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 41.43% per annum.
- TXN price at the close of March 27, 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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