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 19.08% per annum.
- WMT price at the close of April 22, 2024 was $60.14 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 70.00% per annum.
- WMT price at the close of April 22, 2024 was inside the secondary price channel.
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 WMT 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 17, 2022
End date: April 22, 2024
a = 3.2031
b = 0.0005
s = 0.0360
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 19.08%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0360) – 1
= 15.50%
May 17, 2022 calculations
Top border of price channel:
Exp(Y774)
= Exp(a + b × X774 + 2 × s)
= Exp(a + b × 1,120 + 2 × s)
= Exp(3.2031 + 0.0005 × 1,120 + 2 × 0.0360)
= Exp(3.8109)
= $45.19
Bottom border of price channel:
Exp(Y774)
= Exp(a + b × X774 – 2 × s)
= Exp(a + b × 1,120 – 2 × s)
= Exp(3.2031 + 0.0005 × 1,120 – 2 × 0.0360)
= Exp(3.6668)
= $39.13
April 22, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(3.2031 + 0.0005 × 1,826 + 2 × 0.0360)
= Exp(4.1487)
= $63.35
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.2031 + 0.0005 × 1,826 – 2 × 0.0360)
= Exp(4.0046)
= $54.85
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 19.08% per annum.
- WMT price at the close of April 22, 2024 was $60.14 and was inside the primary price channel.
Secondary Trend
Start date: November 30, 2023
End date: April 22, 2024
a = 1.4802
b = 0.0015
s = 0.0205
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 70.00%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0205) – 1
= 8.54%
November 30, 2023 calculations
Top border of price channel:
Exp(Y1,161)
= Exp(a + b × X1,161 + 2 × s)
= Exp(a + b × 1,682 + 2 × s)
= Exp(1.4802 + 0.0015 × 1,682 + 2 × 0.0205)
= Exp(3.9664)
= $52.79
Bottom border of price channel:
Exp(Y1,161)
= Exp(a + b × X1,161 – 2 × s)
= Exp(a + b × 1,682 – 2 × s)
= Exp(1.4802 + 0.0015 × 1,682 – 2 × 0.0205)
= Exp(3.8845)
= $48.64
April 22, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(1.4802 + 0.0015 × 1,826 + 2 × 0.0205)
= Exp(4.1757)
= $65.09
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(1.4802 + 0.0015 × 1,826 – 2 × 0.0205)
= Exp(4.0938)
= $59.97
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 70.00% per annum.
- WMT price at the close of April 22, 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.
Check out WMT and 1,499 other stocks on our new website