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 39.18% per annum.
- SHW price at the close of July 27, 2022 was $231.97 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 284.42% per annum.
- SHW price at the close of July 27, 2022 was lower than the bottom border of the secondary price channel by $10.55 (4.35%). 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 SHW 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: October 21, 2021
End date: July 27, 2022
a = 7.9274
b = -0.0014
s = 0.0722
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0014) – 1
= -39.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0722) – 1
= 33.47%
October 21, 2021 calculations
Top border of price channel:
Exp(Y1,066)
= Exp(a + b × X1,066 + 2 × s)
= Exp(a + b × 1,546 + 2 × s)
= Exp(7.9274 + -0.0014 × 1,546 + 2 × 0.0722)
= Exp(5.9653)
= $389.69
Bottom border of price channel:
Exp(Y1,066)
= Exp(a + b × X1,066 – 2 × s)
= Exp(a + b × 1,546 – 2 × s)
= Exp(7.9274 + -0.0014 × 1,546 – 2 × 0.0722)
= Exp(5.6766)
= $291.96
July 27, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(7.9274 + -0.0014 × 1,825 + 2 × 0.0722)
= Exp(5.5852)
= $266.46
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(7.9274 + -0.0014 × 1,825 – 2 × 0.0722)
= Exp(5.2965)
= $199.63
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 39.18% per annum.
- SHW price at the close of July 27, 2022 was $231.97 and was inside the primary price channel.
Secondary Trend
Start date: June 16, 2022
End date: July 27, 2022
a = -1.1897
b = 0.0037
s = 0.0260
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0037) – 1
= 284.42%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0260) – 1
= 10.95%
June 16, 2022 calculations
Top border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 + 2 × s)
= Exp(a + b × 1,784 + 2 × s)
= Exp(-1.1897 + 0.0037 × 1,784 + 2 × 0.0260)
= Exp(5.4437)
= $231.30
Bottom border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 – 2 × s)
= Exp(a + b × 1,784 – 2 × s)
= Exp(-1.1897 + 0.0037 × 1,784 – 2 × 0.0260)
= Exp(5.3398)
= $208.48
July 27, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(-1.1897 + 0.0037 × 1,825 + 2 × 0.0260)
= Exp(5.5950)
= $269.07
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(-1.1897 + 0.0037 × 1,825 – 2 × 0.0260)
= Exp(5.4911)
= $242.52
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 284.42% per annum.
- SHW price at the close of July 27, 2022 was lower than the bottom border of the secondary price channel by $10.55 (4.35%). This indicates a possible reversal in the secondary trend direction.
Check current SHW price trends.
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