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 98.87% per annum.
- AVGO price at the close of May 20, 2024 was $1,414.03 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 29.50% per annum.
- AVGO price at the close of May 20, 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 AVGO 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 20, 2022
End date: May 20, 2024
a = 3.8185
b = 0.0019
s = 0.0679
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 98.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0679) – 1
= 31.21%
September 20, 2022 calculations
Top border of price channel:
Exp(Y840)
= Exp(a + b × X840 + 2 × s)
= Exp(a + b × 1,218 + 2 × s)
= Exp(3.8185 + 0.0019 × 1,218 + 2 × 0.0679)
= Exp(6.2485)
= $517.22
Bottom border of price channel:
Exp(Y840)
= Exp(a + b × X840 – 2 × s)
= Exp(a + b × 1,218 – 2 × s)
= Exp(3.8185 + 0.0019 × 1,218 – 2 × 0.0679)
= Exp(5.9768)
= $394.19
May 20, 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(3.8185 + 0.0019 × 1,826 + 2 × 0.0679)
= Exp(7.3937)
= $1,625.65
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.8185 + 0.0019 × 1,826 – 2 × 0.0679)
= Exp(7.1220)
= $1,238.94
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 98.87% per annum.
- AVGO price at the close of May 20, 2024 was $1,414.03 and was inside the primary price channel.
Secondary Trend
Start date: January 19, 2024
End date: May 20, 2024
a = 5.9148
b = 0.0007
s = 0.0377
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 29.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0377) – 1
= 16.30%
January 19, 2024 calculations
Top border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 + 2 × s)
= Exp(a + b × 1,704 + 2 × s)
= Exp(5.9148 + 0.0007 × 1,704 + 2 × 0.0377)
= Exp(7.1972)
= $1,335.75
Bottom border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 – 2 × s)
= Exp(a + b × 1,704 – 2 × s)
= Exp(5.9148 + 0.0007 × 1,704 – 2 × 0.0377)
= Exp(7.0463)
= $1,148.57
May 20, 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(5.9148 + 0.0007 × 1,826 + 2 × 0.0377)
= Exp(7.2837)
= $1,456.30
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.9148 + 0.0007 × 1,826 – 2 × 0.0377)
= Exp(7.1327)
= $1,252.24
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 29.50% per annum.
- AVGO 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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