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 98.61% per annum.
- AMD price at the close of May 16, 2024 was $162.62 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 86.17% per annum.
- AMD price at the close of May 16, 2024 was higher than the top border of the secondary price channel by $16.02 (10.93%). 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 AMD 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 22, 2022
End date: April 16, 2024
a = 1.8042
b = 0.0019
s = 0.1140
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 98.61%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1140) – 1
= 57.79%
September 22, 2022 calculations
Top border of price channel:
Exp(Y844)
= Exp(a + b × X844 + 2 × s)
= Exp(a + b × 1,224 + 2 × s)
= Exp(1.8042 + 0.0019 × 1,224 + 2 × 0.1140)
= Exp(4.3332)
= $76.19
Bottom border of price channel:
Exp(Y844)
= Exp(a + b × X844 – 2 × s)
= Exp(a + b × 1,224 – 2 × s)
= Exp(1.8042 + 0.0019 × 1,224 – 2 × 0.1140)
= Exp(3.8771)
= $48.28
April 16, 2024 calculations
Top border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 + 2 × s)
= Exp(a + b × 1,796 + 2 × s)
= Exp(1.8042 + 0.0019 × 1,796 + 2 × 0.1140)
= Exp(5.4085)
= $223.30
Bottom border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 – 2 × s)
= Exp(a + b × 1,796 – 2 × s)
= Exp(1.8042 + 0.0019 × 1,796 – 2 × 0.1140)
= Exp(4.9524)
= $141.51
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 98.61% per annum.
- AMD price at the close of May 16, 2024 was $162.62 and was inside the primary price channel.
Secondary Trend
Start date: February 29, 2024
End date: May 3, 2024
a = 14.8170
b = -0.0054
s = 0.0340
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0054) – 1
= -86.17%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0340) – 1
= 14.58%
February 29, 2024 calculations
Top border of price channel:
Exp(Y1,204)
= Exp(a + b × X1,204 + 2 × s)
= Exp(a + b × 1,749 + 2 × s)
= Exp(14.8170 + -0.0054 × 1,749 + 2 × 0.0340)
= Exp(5.4050)
= $222.53
Bottom border of price channel:
Exp(Y1,204)
= Exp(a + b × X1,204 – 2 × s)
= Exp(a + b × 1,749 – 2 × s)
= Exp(14.8170 + -0.0054 × 1,749 – 2 × 0.0340)
= Exp(5.2689)
= $194.20
May 3, 2024 calculations
Top border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 + 2 × s)
= Exp(a + b × 1,813 + 2 × s)
= Exp(14.8170 + -0.0054 × 1,813 + 2 × 0.0340)
= Exp(5.0581)
= $157.30
Bottom border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 – 2 × s)
= Exp(a + b × 1,813 – 2 × s)
= Exp(14.8170 + -0.0054 × 1,813 – 2 × 0.0340)
= Exp(4.9220)
= $137.28
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 86.17% per annum.
- AMD price at the close of May 16, 2024 was higher than the top border of the secondary price channel by $16.02 (10.93%). This indicates a possible reversal in the secondary trend direction.
- 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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