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 94.86% per annum.
- DIS price at the close of April 18, 2024 was $112.43 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 78.78% per annum.
- DIS price at the close of April 18, 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 DIS 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: September 1, 2023
End date: April 18, 2024
a = 1.4354
b = 0.0018
s = 0.0453
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 94.86%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0453) – 1
= 19.85%
September 1, 2023 calculations
Top border of price channel:
Exp(Y1,100)
= Exp(a + b × X1,100 + 2 × s)
= Exp(a + b × 1,593 + 2 × s)
= Exp(1.4354 + 0.0018 × 1,593 + 2 × 0.0453)
= Exp(4.4376)
= $84.57
Bottom border of price channel:
Exp(Y1,100)
= Exp(a + b × X1,100 – 2 × s)
= Exp(a + b × 1,593 – 2 × s)
= Exp(1.4354 + 0.0018 × 1,593 – 2 × 0.0453)
= Exp(4.2565)
= $70.56
April 18, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(1.4354 + 0.0018 × 1,823 + 2 × 0.0453)
= Exp(4.8579)
= $128.76
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(1.4354 + 0.0018 × 1,823 – 2 × 0.0453)
= Exp(4.6769)
= $107.43
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 94.86% per annum.
- DIS price at the close of April 18, 2024 was $112.43 and was inside the primary price channel.
Secondary Trend
Start date: March 28, 2024
End date: April 18, 2024
a = 12.4662
b = -0.0042
s = 0.0103
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0042) – 1
= -78.78%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0103) – 1
= 4.22%
March 28, 2024 calculations
Top border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 + 2 × s)
= Exp(a + b × 1,802 + 2 × s)
= Exp(12.4662 + -0.0042 × 1,802 + 2 × 0.0103)
= Exp(4.8326)
= $125.54
Bottom border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 – 2 × s)
= Exp(a + b × 1,802 – 2 × s)
= Exp(12.4662 + -0.0042 × 1,802 – 2 × 0.0103)
= Exp(4.7913)
= $120.45
April 18, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(12.4662 + -0.0042 × 1,823 + 2 × 0.0103)
= Exp(4.7434)
= $114.82
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(12.4662 + -0.0042 × 1,823 – 2 × 0.0103)
= Exp(4.7021)
= $110.17
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 78.78% per annum.
- DIS price at the close of April 18, 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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