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 52.94% per annum.
- MCD price at the close of April 19, 2024 was $271.99 and was higher than the top border of the primary price channel by $0.42 (0.15%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 30.52% per annum.
- MCD price at the close of April 19, 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 MCD 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: February 21, 2024
End date: April 17, 2024
a = 9.3466
b = -0.0021
s = 0.0120
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0021) – 1
= -52.94%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0120) – 1
= 4.91%
February 21, 2024 calculations
Top border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 + 2 × s)
= Exp(a + b × 1,766 + 2 × s)
= Exp(9.3466 + -0.0021 × 1,766 + 2 × 0.0120)
= Exp(5.7240)
= $306.13
Bottom border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 – 2 × s)
= Exp(a + b × 1,766 – 2 × s)
= Exp(9.3466 + -0.0021 × 1,766 – 2 × 0.0120)
= Exp(5.6761)
= $291.81
April 17, 2024 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,822 + 2 × s)
= Exp(9.3466 + -0.0021 × 1,822 + 2 × 0.0120)
= Exp(5.6084)
= $272.70
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,822 – 2 × s)
= Exp(9.3466 + -0.0021 × 1,822 – 2 × 0.0120)
= Exp(5.5605)
= $259.94
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 52.94% per annum.
- MCD price at the close of April 19, 2024 was $271.99 and was higher than the top border of the primary price channel by $0.42 (0.15%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 5, 2024
End date: April 19, 2024
a = 4.2663
b = 0.0007
s = 0.0072
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 30.52%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0072) – 1
= 2.91%
April 5, 2024 calculations
Top border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 + 2 × s)
= Exp(a + b × 1,810 + 2 × s)
= Exp(4.2663 + 0.0007 × 1,810 + 2 × 0.0072)
= Exp(5.6013)
= $270.78
Bottom border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 – 2 × s)
= Exp(a + b × 1,810 – 2 × s)
= Exp(4.2663 + 0.0007 × 1,810 – 2 × 0.0072)
= Exp(5.5727)
= $263.14
April 19, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.2663 + 0.0007 × 1,824 + 2 × 0.0072)
= Exp(5.6115)
= $273.56
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.2663 + 0.0007 × 1,824 – 2 × 0.0072)
= Exp(5.5829)
= $265.84
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 30.52% per annum.
- MCD price at the close of April 19, 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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