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 6.33% per annum.
- ECL price at the close of February 25, 2022 was $180.30 and was lower than the bottom border of the primary price channel by $13.63 (7.03%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 86.71% per annum.
- ECL price at the close of February 25, 2022 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 ECL 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 28, 2019
End date: February 25, 2022
a = 5.0947
b = 0.0002
s = 0.0671
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 6.33%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0671) – 1
= 30.76%
March 28, 2019 calculations
Top border of price channel:
Exp(Y524)
= Exp(a + b × X524 + 2 × s)
= Exp(a + b × 759 + 2 × s)
= Exp(5.0947 + 0.0002 × 759 + 2 × 0.0671)
= Exp(5.3565)
= $211.99
Bottom border of price channel:
Exp(Y524)
= Exp(a + b × X524 – 2 × s)
= Exp(a + b × 759 – 2 × s)
= Exp(5.0947 + 0.0002 × 759 – 2 × 0.0671)
= Exp(5.0883)
= $162.12
February 25, 2022 calculations
Top border of price channel:
Exp(Y1,259)
= Exp(a + b × X1,259 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(5.0947 + 0.0002 × 1,824 + 2 × 0.0671)
= Exp(5.5357)
= $253.59
Bottom border of price channel:
Exp(Y1,259)
= Exp(a + b × X1,259 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(5.0947 + 0.0002 × 1,824 – 2 × 0.0671)
= Exp(5.2675)
= $193.93
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 6.33% per annum.
- ECL price at the close of February 25, 2022 was $180.30 and was lower than the bottom border of the primary price channel by $13.63 (7.03%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: December 27, 2021
End date: February 25, 2022
a = 15.2222
b = -0.0055
s = 0.0343
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0055) – 1
= -86.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0343) – 1
= 14.72%
December 27, 2021 calculations
Top border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 + 2 × s)
= Exp(a + b × 1,764 + 2 × s)
= Exp(15.2222 + -0.0055 × 1,764 + 2 × 0.0343)
= Exp(5.5386)
= $254.31
Bottom border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 – 2 × s)
= Exp(a + b × 1,764 – 2 × s)
= Exp(15.2222 + -0.0055 × 1,764 – 2 × 0.0343)
= Exp(5.4012)
= $221.67
February 25, 2022 calculations
Top border of price channel:
Exp(Y1,259)
= Exp(a + b × X1,259 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(15.2222 + -0.0055 × 1,824 + 2 × 0.0343)
= Exp(5.2068)
= $182.52
Bottom border of price channel:
Exp(Y1,259)
= Exp(a + b × X1,259 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(15.2222 + -0.0055 × 1,824 – 2 × 0.0343)
= Exp(5.0695)
= $159.09
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 86.71% per annum.
- ECL price at the close of February 25, 2022 was inside the secondary price channel.
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