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 86.49% per annum.
- UAL price at the close of April 20, 2023 was $44.89 and was lower than the bottom border of the primary price channel by $101.13 (69.26%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 13.74% per annum.
- UAL price at the close of April 20, 2023 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 UAL 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 12, 2020
End date: July 6, 2021
a = 2.1051
b = 0.0017
s = 0.1170
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0017) – 1
= 86.49%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1170) – 1
= 59.66%
March 12, 2020 calculations
Top border of price channel:
Exp(Y475)
= Exp(a + b × X475 + 2 × s)
= Exp(a + b × 689 + 2 × s)
= Exp(2.1051 + 0.0017 × 689 + 2 × 0.1170)
= Exp(3.5154)
= $33.63
Bottom border of price channel:
Exp(Y475)
= Exp(a + b × X475 – 2 × s)
= Exp(a + b × 689 – 2 × s)
= Exp(2.1051 + 0.0017 × 689 – 2 × 0.1170)
= Exp(3.0475)
= $21.06
July 6, 2021 calculations
Top border of price channel:
Exp(Y806)
= Exp(a + b × X806 + 2 × s)
= Exp(a + b × 1,170 + 2 × s)
= Exp(2.1051 + 0.0017 × 1,170 + 2 × 0.1170)
= Exp(4.3367)
= $76.45
Bottom border of price channel:
Exp(Y806)
= Exp(a + b × X806 – 2 × s)
= Exp(a + b × 1,170 – 2 × s)
= Exp(2.1051 + 0.0017 × 1,170 – 2 × 0.1170)
= Exp(3.8688)
= $47.88
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 86.49% per annum.
- UAL price at the close of April 20, 2023 was $44.89 and was lower than the bottom border of the primary price channel by $101.13 (69.26%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 24, 2020
End date: January 9, 2023
a = 4.3444
b = -0.0004
s = 0.1062
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0004) – 1
= -13.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1062) – 1
= 52.95%
November 24, 2020 calculations
Top border of price channel:
Exp(Y654)
= Exp(a + b × X654 + 2 × s)
= Exp(a + b × 946 + 2 × s)
= Exp(4.3444 + -0.0004 × 946 + 2 × 0.1062)
= Exp(4.1738)
= $64.96
Bottom border of price channel:
Exp(Y654)
= Exp(a + b × X654 – 2 × s)
= Exp(a + b × 946 – 2 × s)
= Exp(4.3444 + -0.0004 × 946 – 2 × 0.1062)
= Exp(3.7489)
= $42.47
January 9, 2023 calculations
Top border of price channel:
Exp(Y1,187)
= Exp(a + b × X1,187 + 2 × s)
= Exp(a + b × 1,722 + 2 × s)
= Exp(4.3444 + -0.0004 × 1,722 + 2 × 0.1062)
= Exp(3.8596)
= $47.45
Bottom border of price channel:
Exp(Y1,187)
= Exp(a + b × X1,187 – 2 × s)
= Exp(a + b × 1,722 – 2 × s)
= Exp(4.3444 + -0.0004 × 1,722 – 2 × 0.1062)
= Exp(3.4346)
= $31.02
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 13.74% per annum.
- UAL price at the close of April 20, 2023 was inside the secondary price channel.
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