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 32.44% per annum.
- GM price at the close of May 19, 2025 was $50.03 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 31.83% per annum.
- GM price at the close of May 19, 2025 was higher than the top border of the secondary price channel by $1.72 (3.55%). 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 GM 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 15, 2023
End date: March 26, 2025
a = 2.6180
b = 0.0008
s = 0.1030
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 32.44%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1030) – 1
= 50.99%
March 15, 2023 calculations
Top border of price channel:
Exp(Y709)
= Exp(a + b × X709 + 2 × s)
= Exp(a + b × 1,029 + 2 × s)
= Exp(2.6180 + 0.0008 × 1,029 + 2 × 0.1030)
= Exp(3.6161)
= $37.19
Bottom border of price channel:
Exp(Y709)
= Exp(a + b × X709 – 2 × s)
= Exp(a + b × 1,029 – 2 × s)
= Exp(2.6180 + 0.0008 × 1,029 – 2 × 0.1030)
= Exp(3.2040)
= $24.63
March 26, 2025 calculations
Top border of price channel:
Exp(Y1,218)
= Exp(a + b × X1,218 + 2 × s)
= Exp(a + b × 1,771 + 2 × s)
= Exp(2.6180 + 0.0008 × 1,771 + 2 × 0.1030)
= Exp(4.1872)
= $65.84
Bottom border of price channel:
Exp(Y1,218)
= Exp(a + b × X1,218 – 2 × s)
= Exp(a + b × 1,771 – 2 × s)
= Exp(2.6180 + 0.0008 × 1,771 – 2 × 0.1030)
= Exp(3.7751)
= $43.60
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 32.44% per annum.
- GM price at the close of May 19, 2025 was $50.03 and was inside the primary price channel.
Secondary Trend
Start date: October 22, 2024
End date: May 9, 2025
a = 5.7116
b = -0.0010
s = 0.0408
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -31.83%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0408) – 1
= 17.73%
October 22, 2024 calculations
Top border of price channel:
Exp(Y1,113)
= Exp(a + b × X1,113 + 2 × s)
= Exp(a + b × 1,616 + 2 × s)
= Exp(5.7116 + -0.0010 × 1,616 + 2 × 0.0408)
= Exp(4.0971)
= $60.16
Bottom border of price channel:
Exp(Y1,113)
= Exp(a + b × X1,113 – 2 × s)
= Exp(a + b × 1,616 – 2 × s)
= Exp(5.7116 + -0.0010 × 1,616 – 2 × 0.0408)
= Exp(3.9338)
= $51.10
May 9, 2025 calculations
Top border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 + 2 × s)
= Exp(a + b × 1,815 + 2 × s)
= Exp(5.7116 + -0.0010 × 1,815 + 2 × 0.0408)
= Exp(3.8882)
= $48.82
Bottom border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 – 2 × s)
= Exp(a + b × 1,815 – 2 × s)
= Exp(5.7116 + -0.0010 × 1,815 – 2 × 0.0408)
= Exp(3.7249)
= $41.47
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 31.83% per annum.
- GM price at the close of May 19, 2025 was higher than the top border of the secondary price channel by $1.72 (3.55%). This indicates a possible reversal in the secondary trend direction.
- Discover a new approach to trend analysis.
- Check the power of mathematical statistics.
- Price channels have never been so accurately estimated.
Check out GM and 1,499 other stocks on our new website