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 44.76% per annum.
- SLB price at the close of April 24, 2024 was $49.11 and was lower than the bottom border of the primary price channel by $10.48 (17.58%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 29.52% per annum.
- SLB price at the close of April 24, 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 SLB 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 9, 2020
End date: November 6, 2023
a = 2.4966
b = 0.0010
s = 0.1298
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0010) – 1
= 44.76%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1298) – 1
= 68.08%
March 9, 2020 calculations
Top border of price channel:
Exp(Y219)
= Exp(a + b × X219 + 2 × s)
= Exp(a + b × 319 + 2 × s)
= Exp(2.4966 + 0.0010 × 319 + 2 × 0.1298)
= Exp(3.0795)
= $21.75
Bottom border of price channel:
Exp(Y219)
= Exp(a + b × X219 – 2 × s)
= Exp(a + b × 319 – 2 × s)
= Exp(2.4966 + 0.0010 × 319 – 2 × 0.1298)
= Exp(2.5603)
= $12.94
November 6, 2023 calculations
Top border of price channel:
Exp(Y1,142)
= Exp(a + b × X1,142 + 2 × s)
= Exp(a + b × 1,656 + 2 × s)
= Exp(2.4966 + 0.0010 × 1,656 + 2 × 0.1298)
= Exp(4.4344)
= $84.30
Bottom border of price channel:
Exp(Y1,142)
= Exp(a + b × X1,142 – 2 × s)
= Exp(a + b × 1,656 – 2 × s)
= Exp(2.4966 + 0.0010 × 1,656 – 2 × 0.1298)
= Exp(3.9152)
= $50.16
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 44.76% per annum.
- SLB price at the close of April 24, 2024 was $49.11 and was lower than the bottom border of the primary price channel by $10.48 (17.58%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 11, 2023
End date: March 8, 2024
a = 5.5829
b = -0.0010
s = 0.0405
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -29.52%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0405) – 1
= 17.59%
July 11, 2023 calculations
Top border of price channel:
Exp(Y1,059)
= Exp(a + b × X1,059 + 2 × s)
= Exp(a + b × 1,538 + 2 × s)
= Exp(5.5829 + -0.0010 × 1,538 + 2 × 0.0405)
= Exp(4.1896)
= $66.00
Bottom border of price channel:
Exp(Y1,059)
= Exp(a + b × X1,059 – 2 × s)
= Exp(a + b × 1,538 – 2 × s)
= Exp(5.5829 + -0.0010 × 1,538 – 2 × 0.0405)
= Exp(4.0276)
= $56.13
March 8, 2024 calculations
Top border of price channel:
Exp(Y1,226)
= Exp(a + b × X1,226 + 2 × s)
= Exp(a + b × 1,779 + 2 × s)
= Exp(5.5829 + -0.0010 × 1,779 + 2 × 0.0405)
= Exp(3.9586)
= $52.39
Bottom border of price channel:
Exp(Y1,226)
= Exp(a + b × X1,226 – 2 × s)
= Exp(a + b × 1,779 – 2 × s)
= Exp(5.5829 + -0.0010 × 1,779 – 2 × 0.0405)
= Exp(3.7966)
= $44.55
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 29.52% per annum.
- SLB price at the close of April 24, 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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