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 4.72% per annum.
- OXY price at the close of April 26, 2024 was $67.78 and was higher than the top border of the primary price channel by $0.87 (1.30%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 115.44% per annum.
- OXY price at the close of April 26, 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 OXY 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 4, 2022
End date: March 27, 2024
a = 4.3268
b = -0.0001
s = 0.0590
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -4.72%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0590) – 1
= 26.62%
May 4, 2022 calculations
Top border of price channel:
Exp(Y761)
= Exp(a + b × X761 + 2 × s)
= Exp(a + b × 1,101 + 2 × s)
= Exp(4.3268 + -0.0001 × 1,101 + 2 × 0.0590)
= Exp(4.2991)
= $73.63
Bottom border of price channel:
Exp(Y761)
= Exp(a + b × X761 – 2 × s)
= Exp(a + b × 1,101 – 2 × s)
= Exp(4.3268 + -0.0001 × 1,101 – 2 × 0.0590)
= Exp(4.0631)
= $58.15
March 27, 2024 calculations
Top border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 + 2 × s)
= Exp(a + b × 1,794 + 2 × s)
= Exp(4.3268 + -0.0001 × 1,794 + 2 × 0.0590)
= Exp(4.2073)
= $67.18
Bottom border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 – 2 × s)
= Exp(a + b × 1,794 – 2 × s)
= Exp(4.3268 + -0.0001 × 1,794 – 2 × 0.0590)
= Exp(3.9713)
= $53.05
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 4.72% per annum.
- OXY price at the close of April 26, 2024 was $67.78 and was higher than the top border of the primary price channel by $0.87 (1.30%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 16, 2024
End date: April 26, 2024
a = 0.3970
b = 0.0021
s = 0.0186
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0021) – 1
= 115.44%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0186) – 1
= 7.70%
January 16, 2024 calculations
Top border of price channel:
Exp(Y1,187)
= Exp(a + b × X1,187 + 2 × s)
= Exp(a + b × 1,723 + 2 × s)
= Exp(0.3970 + 0.0021 × 1,723 + 2 × 0.0186)
= Exp(4.0572)
= $57.81
Bottom border of price channel:
Exp(Y1,187)
= Exp(a + b × X1,187 – 2 × s)
= Exp(a + b × 1,723 – 2 × s)
= Exp(0.3970 + 0.0021 × 1,723 – 2 × 0.0186)
= Exp(3.9830)
= $53.68
April 26, 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(0.3970 + 0.0021 × 1,824 + 2 × 0.0186)
= Exp(4.2696)
= $71.49
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(0.3970 + 0.0021 × 1,824 – 2 × 0.0186)
= Exp(4.1954)
= $66.38
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 115.44% per annum.
- OXY price at the close of April 26, 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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