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 27.24% per annum.
- ABNB price at the close of May 20, 2024 was $146.37 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 40.05% per annum.
- ABNB price at the close of May 20, 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 ABNB 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: June 10, 2022
End date: May 20, 2024
a = 4.2173
b = 0.0007
s = 0.0952
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 27.24%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0952) – 1
= 46.32%
June 10, 2022 calculations
Top border of price channel:
Exp(Y377)
= Exp(a + b × X377 + 2 × s)
= Exp(a + b × 547 + 2 × s)
= Exp(4.2173 + 0.0007 × 547 + 2 × 0.0952)
= Exp(4.7686)
= $117.75
Bottom border of price channel:
Exp(Y377)
= Exp(a + b × X377 – 2 × s)
= Exp(a + b × 547 – 2 × s)
= Exp(4.2173 + 0.0007 × 547 – 2 × 0.0952)
= Exp(4.3880)
= $80.48
May 20, 2024 calculations
Top border of price channel:
Exp(Y864)
= Exp(a + b × X864 + 2 × s)
= Exp(a + b × 1,257 + 2 × s)
= Exp(4.2173 + 0.0007 × 1,257 + 2 × 0.0952)
= Exp(5.2372)
= $188.13
Bottom border of price channel:
Exp(Y864)
= Exp(a + b × X864 – 2 × s)
= Exp(a + b × 1,257 – 2 × s)
= Exp(4.2173 + 0.0007 × 1,257 – 2 × 0.0952)
= Exp(4.8565)
= $128.58
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 27.24% per annum.
- ABNB price at the close of May 20, 2024 was $146.37 and was inside the primary price channel.
Secondary Trend
Start date: March 6, 2024
End date: May 20, 2024
a = 6.7810
b = -0.0014
s = 0.0265
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0014) – 1
= -40.05%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0265) – 1
= 11.19%
March 6, 2024 calculations
Top border of price channel:
Exp(Y812)
= Exp(a + b × X812 + 2 × s)
= Exp(a + b × 1,182 + 2 × s)
= Exp(6.7810 + -0.0014 × 1,182 + 2 × 0.0265)
= Exp(5.1772)
= $177.19
Bottom border of price channel:
Exp(Y812)
= Exp(a + b × X812 – 2 × s)
= Exp(a + b × 1,182 – 2 × s)
= Exp(6.7810 + -0.0014 × 1,182 – 2 × 0.0265)
= Exp(5.0712)
= $159.37
May 20, 2024 calculations
Top border of price channel:
Exp(Y864)
= Exp(a + b × X864 + 2 × s)
= Exp(a + b × 1,257 + 2 × s)
= Exp(6.7810 + -0.0014 × 1,257 + 2 × 0.0265)
= Exp(5.0721)
= $159.51
Bottom border of price channel:
Exp(Y864)
= Exp(a + b × X864 – 2 × s)
= Exp(a + b × 1,257 – 2 × s)
= Exp(6.7810 + -0.0014 × 1,257 – 2 × 0.0265)
= Exp(4.9661)
= $143.46
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 40.05% per annum.
- ABNB price at the close of May 20, 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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