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 60.23% per annum.
- CMG price at the close of July 26, 2024 was $49.83 and was lower than the bottom border of the primary price channel by $3.95 (7.34%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 92.71% per annum.
- CMG 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 CMG 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, 2022
End date: July 16, 2024
a = 1.7933
b = 0.0013
s = 0.0822
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 60.23%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0822) – 1
= 38.92%
October 26, 2022 calculations
Top border of price channel:
Exp(Y819)
= Exp(a + b × X819 + 2 × s)
= Exp(a + b × 1,185 + 2 × s)
= Exp(1.7933 + 0.0013 × 1,185 + 2 × 0.0822)
= Exp(3.4882)
= $32.73
Bottom border of price channel:
Exp(Y819)
= Exp(a + b × X819 – 2 × s)
= Exp(a + b × 1,185 – 2 × s)
= Exp(1.7933 + 0.0013 × 1,185 – 2 × 0.0822)
= Exp(3.1595)
= $23.56
July 16, 2024 calculations
Top border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 + 2 × s)
= Exp(a + b × 1,814 + 2 × s)
= Exp(1.7933 + 0.0013 × 1,814 + 2 × 0.0822)
= Exp(4.3006)
= $73.74
Bottom border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 – 2 × s)
= Exp(a + b × 1,814 – 2 × s)
= Exp(1.7933 + 0.0013 × 1,814 – 2 × 0.0822)
= Exp(3.9719)
= $53.09
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 60.23% per annum.
- CMG price at the close of July 26, 2024 was $49.83 and was lower than the bottom border of the primary price channel by $3.95 (7.34%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 17, 2024
End date: July 26, 2024
a = 17.0302
b = -0.0072
s = 0.0214
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0072) – 1
= -92.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0214) – 1
= 8.92%
June 17, 2024 calculations
Top border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 + 2 × s)
= Exp(a + b × 1,785 + 2 × s)
= Exp(17.0302 + -0.0072 × 1,785 + 2 × 0.0214)
= Exp(4.2650)
= $71.17
Bottom border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 – 2 × s)
= Exp(a + b × 1,785 – 2 × s)
= Exp(17.0302 + -0.0072 × 1,785 – 2 × 0.0214)
= Exp(4.1796)
= $65.34
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(17.0302 + -0.0072 × 1,824 + 2 × 0.0214)
= Exp(3.9852)
= $53.80
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(17.0302 + -0.0072 × 1,824 – 2 × 0.0214)
= Exp(3.8997)
= $49.39
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 92.71% per annum.
- CMG 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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