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 94.73% per annum.
- ANET price at the close of July 26, 2024 was $319.21 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 90.95% per annum.
- ANET price at the close of July 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 ANET 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: December 15, 2022
End date: July 26, 2024
a = 2.5124
b = 0.0018
s = 0.0703
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 94.73%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0703) – 1
= 32.49%
December 15, 2022 calculations
Top border of price channel:
Exp(Y854)
= Exp(a + b × X854 + 2 × s)
= Exp(a + b × 1,235 + 2 × s)
= Exp(2.5124 + 0.0018 × 1,235 + 2 × 0.0703)
= Exp(4.9081)
= $135.38
Bottom border of price channel:
Exp(Y854)
= Exp(a + b × X854 – 2 × s)
= Exp(a + b × 1,235 – 2 × s)
= Exp(2.5124 + 0.0018 × 1,235 – 2 × 0.0703)
= Exp(4.6267)
= $102.18
July 26, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(2.5124 + 0.0018 × 1,824 + 2 × 0.0703)
= Exp(5.9835)
= $396.83
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(2.5124 + 0.0018 × 1,824 – 2 × 0.0703)
= Exp(5.7022)
= $299.51
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 94.73% per annum.
- ANET price at the close of July 26, 2024 was $319.21 and was inside the primary price channel.
Secondary Trend
Start date: July 3, 2024
End date: July 26, 2024
a = 17.7874
b = -0.0066
s = 0.0271
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0066) – 1
= -90.95%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0271) – 1
= 11.44%
July 3, 2024 calculations
Top border of price channel:
Exp(Y1,241)
= Exp(a + b × X1,241 + 2 × s)
= Exp(a + b × 1,801 + 2 × s)
= Exp(17.7874 + -0.0066 × 1,801 + 2 × 0.0271)
= Exp(5.9878)
= $398.53
Bottom border of price channel:
Exp(Y1,241)
= Exp(a + b × X1,241 – 2 × s)
= Exp(a + b × 1,801 – 2 × s)
= Exp(17.7874 + -0.0066 × 1,801 – 2 × 0.0271)
= Exp(5.8795)
= $357.63
July 26, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(17.7874 + -0.0066 × 1,824 + 2 × 0.0271)
= Exp(5.8364)
= $342.55
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(17.7874 + -0.0066 × 1,824 – 2 × 0.0271)
= Exp(5.7281)
= $307.39
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 90.95% per annum.
- ANET price at the close of July 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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