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 30.71% per annum.
- EOG price at the close of February 27, 2020 was $60.00 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 10.49% per annum.
- EOG price at the close of February 27, 2020 was lower than the bottom border of the secondary price channel by $8.33 (12.19%). 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 EOG 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: April 23, 2018
End date: December 16, 2019
a = 6.0255
b = -0.0010
s = 0.0653
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -30.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0653) – 1
= 29.83%
April 23, 2018 calculations
Top border of price channel:
Exp(Y792)
= Exp(a + b × X792 + 2 × s)
= Exp(a + b × 1,148 + 2 × s)
= Exp(6.0255 + -0.0010 × 1,148 + 2 × 0.0653)
= Exp(5.0022)
= $148.74
Bottom border of price channel:
Exp(Y792)
= Exp(a + b × X792 – 2 × s)
= Exp(a + b × 1,148 – 2 × s)
= Exp(6.0255 + -0.0010 × 1,148 – 2 × 0.0653)
= Exp(4.7411)
= $114.56
December 16, 2019 calculations
Top border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 + 2 × s)
= Exp(a + b × 1,750 + 2 × s)
= Exp(6.0255 + -0.0010 × 1,750 + 2 × 0.0653)
= Exp(4.3971)
= $81.22
Bottom border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 – 2 × s)
= Exp(a + b × 1,750 – 2 × s)
= Exp(6.0255 + -0.0010 × 1,750 – 2 × 0.0653)
= Exp(4.1360)
= $62.55
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 30.71% per annum.
- EOG price at the close of February 27, 2020 was $60.00 and was inside the primary price channel.
Secondary Trend
Start date: August 5, 2019
End date: February 21, 2020
a = 3.8607
b = 0.0003
s = 0.0673
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 10.49%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0673) – 1
= 30.87%
August 5, 2019 calculations
Top border of price channel:
Exp(Y1,115)
= Exp(a + b × X1,115 + 2 × s)
= Exp(a + b × 1,617 + 2 × s)
= Exp(3.8607 + 0.0003 × 1,617 + 2 × 0.0673)
= Exp(4.4371)
= $84.53
Bottom border of price channel:
Exp(Y1,115)
= Exp(a + b × X1,115 – 2 × s)
= Exp(a + b × 1,617 – 2 × s)
= Exp(3.8607 + 0.0003 × 1,617 – 2 × 0.0673)
= Exp(4.1681)
= $64.59
February 21, 2020 calculations
Top border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 + 2 × s)
= Exp(a + b × 1,817 + 2 × s)
= Exp(3.8607 + 0.0003 × 1,817 + 2 × 0.0673)
= Exp(4.4918)
= $89.28
Bottom border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 – 2 × s)
= Exp(a + b × 1,817 – 2 × s)
= Exp(3.8607 + 0.0003 × 1,817 – 2 × 0.0673)
= Exp(4.2227)
= $68.22
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 10.49% per annum.
- EOG price at the close of February 27, 2020 was lower than the bottom border of the secondary price channel by $8.33 (12.19%). This indicates a possible reversal in the secondary trend direction.
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