Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 14.70% per annum.
- GILD price at the close of May 20, 2024 was $67.90 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.41% per annum.
- GILD price at the close of May 20, 2024 was higher than the top border of the secondary price channel by $0.65 (0.96%). This indicates a possible reversal in the secondary trend direction.
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 GILD 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: November 8, 2022
End date: October 12, 2023
a = 5.0137
b = -0.0004
s = 0.0252
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0004) – 1
= -14.70%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0252) – 1
= 10.58%
November 8, 2022 calculations
Top border of price channel:
Exp(Y875)
= Exp(a + b × X875 + 2 × s)
= Exp(a + b × 1,267 + 2 × s)
= Exp(5.0137 + -0.0004 × 1,267 + 2 × 0.0252)
= Exp(4.5122)
= $91.13
Bottom border of price channel:
Exp(Y875)
= Exp(a + b × X875 – 2 × s)
= Exp(a + b × 1,267 – 2 × s)
= Exp(5.0137 + -0.0004 × 1,267 – 2 × 0.0252)
= Exp(4.4116)
= $82.40
October 12, 2023 calculations
Top border of price channel:
Exp(Y1,107)
= Exp(a + b × X1,107 + 2 × s)
= Exp(a + b × 1,605 + 2 × s)
= Exp(5.0137 + -0.0004 × 1,605 + 2 × 0.0252)
= Exp(4.3651)
= $78.65
Bottom border of price channel:
Exp(Y1,107)
= Exp(a + b × X1,107 – 2 × s)
= Exp(a + b × 1,605 – 2 × s)
= Exp(5.0137 + -0.0004 × 1,605 – 2 × 0.0252)
= Exp(4.2644)
= $71.13
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 14.70% per annum.
- GILD price at the close of May 20, 2024 was $67.90 and was inside the primary price channel.
Secondary Trend
Start date: December 28, 2023
End date: May 10, 2024
a = 7.7612
b = -0.0020
s = 0.0291
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0020) – 1
= -51.41%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0291) – 1
= 12.34%
December 28, 2023 calculations
Top border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 + 2 × s)
= Exp(a + b × 1,682 + 2 × s)
= Exp(7.7612 + -0.0020 × 1,682 + 2 × 0.0291)
= Exp(4.4932)
= $89.41
Bottom border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 – 2 × s)
= Exp(a + b × 1,682 – 2 × s)
= Exp(7.7612 + -0.0020 × 1,682 – 2 × 0.0291)
= Exp(4.3769)
= $79.59
May 10, 2024 calculations
Top border of price channel:
Exp(Y1,252)
= Exp(a + b × X1,252 + 2 × s)
= Exp(a + b × 1,816 + 2 × s)
= Exp(7.7612 + -0.0020 × 1,816 + 2 × 0.0291)
= Exp(4.2282)
= $68.59
Bottom border of price channel:
Exp(Y1,252)
= Exp(a + b × X1,252 – 2 × s)
= Exp(a + b × 1,816 – 2 × s)
= Exp(7.7612 + -0.0020 × 1,816 – 2 × 0.0291)
= Exp(4.1119)
= $61.06
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.41% per annum.
- GILD price at the close of May 20, 2024 was higher than the top border of the secondary price channel by $0.65 (0.96%). 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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