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 47.12% per annum.
- MO price at the close of October 31, 2024 was $53.42 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.21% per annum.
- MO price at the close of October 31, 2024 was higher than the top border of the secondary price channel by $2.81 (5.54%). 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 MO 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: October 26, 2023
End date: October 31, 2024
a = 2.0058
b = 0.0011
s = 0.0355
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 47.12%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0355) – 1
= 15.26%
October 26, 2023 calculations
Top border of price channel:
Exp(Y1,002)
= Exp(a + b × X1,002 + 2 × s)
= Exp(a + b × 1,455 + 2 × s)
= Exp(2.0058 + 0.0011 × 1,455 + 2 × 0.0355)
= Exp(3.6160)
= $37.19
Bottom border of price channel:
Exp(Y1,002)
= Exp(a + b × X1,002 – 2 × s)
= Exp(a + b × 1,455 – 2 × s)
= Exp(2.0058 + 0.0011 × 1,455 – 2 × 0.0355)
= Exp(3.4739)
= $32.26
October 31, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(2.0058 + 0.0011 × 1,826 + 2 × 0.0355)
= Exp(4.0084)
= $55.06
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(2.0058 + 0.0011 × 1,826 – 2 × 0.0355)
= Exp(3.8664)
= $47.77
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 47.12% per annum.
- MO price at the close of October 31, 2024 was $53.42 and was inside the primary price channel.
Secondary Trend
Start date: August 23, 2024
End date: October 31, 2024
a = 5.3397
b = -0.0008
s = 0.0190
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.21%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0190) – 1
= 7.88%
August 23, 2024 calculations
Top border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 + 2 × s)
= Exp(a + b × 1,757 + 2 × s)
= Exp(5.3397 + -0.0008 × 1,757 + 2 × 0.0190)
= Exp(3.9792)
= $53.47
Bottom border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 – 2 × s)
= Exp(a + b × 1,757 – 2 × s)
= Exp(5.3397 + -0.0008 × 1,757 – 2 × 0.0190)
= Exp(3.9033)
= $49.57
October 31, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(5.3397 + -0.0008 × 1,826 + 2 × 0.0190)
= Exp(3.9242)
= $50.61
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.3397 + -0.0008 × 1,826 – 2 × 0.0190)
= Exp(3.8484)
= $46.92
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.21% per annum.
- MO price at the close of October 31, 2024 was higher than the top border of the secondary price channel by $2.81 (5.54%). This indicates a possible reversal in the secondary trend direction.