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 91.96% per annum.
- GE price at the close of May 9, 2025 was $214.96 and was lower than the bottom border of the primary price channel by $8.45 (3.78%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 27.49% per annum.
- GE price at the close of May 9, 2025 was inside the secondary price channel.
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 GE 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: May 9, 2022
End date: December 4, 2024
a = 2.3357
b = 0.0018
s = 0.0927
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 91.96%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0927) – 1
= 44.91%
May 9, 2022 calculations
Top border of price channel:
Exp(Y503)
= Exp(a + b × X503 + 2 × s)
= Exp(a + b × 728 + 2 × s)
= Exp(2.3357 + 0.0018 × 728 + 2 × 0.0927)
= Exp(3.8218)
= $45.69
Bottom border of price channel:
Exp(Y503)
= Exp(a + b × X503 – 2 × s)
= Exp(a + b × 728 – 2 × s)
= Exp(2.3357 + 0.0018 × 728 – 2 × 0.0927)
= Exp(3.4509)
= $31.53
December 4, 2024 calculations
Top border of price channel:
Exp(Y1,150)
= Exp(a + b × X1,150 + 2 × s)
= Exp(a + b × 1,668 + 2 × s)
= Exp(2.3357 + 0.0018 × 1,668 + 2 × 0.0927)
= Exp(5.5013)
= $245.00
Bottom border of price channel:
Exp(Y1,150)
= Exp(a + b × X1,150 – 2 × s)
= Exp(a + b × 1,668 – 2 × s)
= Exp(2.3357 + 0.0018 × 1,668 – 2 × 0.0927)
= Exp(5.1303)
= $169.07
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 91.96% per annum.
- GE price at the close of May 9, 2025 was $214.96 and was lower than the bottom border of the primary price channel by $8.45 (3.78%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 3, 2024
End date: May 9, 2025
a = 4.0928
b = 0.0007
s = 0.0524
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 27.49%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0524) – 1
= 23.32%
April 3, 2024 calculations
Top border of price channel:
Exp(Y980)
= Exp(a + b × X980 + 2 × s)
= Exp(a + b × 1,423 + 2 × s)
= Exp(4.0928 + 0.0007 × 1,423 + 2 × 0.0524)
= Exp(5.1444)
= $171.48
Bottom border of price channel:
Exp(Y980)
= Exp(a + b × X980 – 2 × s)
= Exp(a + b × 1,423 – 2 × s)
= Exp(4.0928 + 0.0007 × 1,423 – 2 × 0.0524)
= Exp(4.9348)
= $139.05
May 9, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.0928 + 0.0007 × 1,824 + 2 × 0.0524)
= Exp(5.4113)
= $223.92
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.0928 + 0.0007 × 1,824 – 2 × 0.0524)
= Exp(5.2017)
= $181.57
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 27.49% per annum.
- GE price at the close of May 9, 2025 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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