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 49.46% per annum.
- INTU price at the close of May 20, 2024 was $670.15 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 9.09% per annum.
- INTU price at the close of May 20, 2024 was higher than the top border of the secondary price channel by $11.29 (1.71%). 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 INTU 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 2, 2022
End date: May 20, 2024
a = 4.5077
b = 0.0011
s = 0.0472
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 49.46%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0472) – 1
= 20.79%
November 2, 2022 calculations
Top border of price channel:
Exp(Y871)
= Exp(a + b × X871 + 2 × s)
= Exp(a + b × 1,261 + 2 × s)
= Exp(4.5077 + 0.0011 × 1,261 + 2 × 0.0472)
= Exp(5.9906)
= $399.64
Bottom border of price channel:
Exp(Y871)
= Exp(a + b × X871 – 2 × s)
= Exp(a + b × 1,261 – 2 × s)
= Exp(4.5077 + 0.0011 × 1,261 – 2 × 0.0472)
= Exp(5.8017)
= $330.85
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(4.5077 + 0.0011 × 1,826 + 2 × 0.0472)
= Exp(6.6126)
= $744.44
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.5077 + 0.0011 × 1,826 – 2 × 0.0472)
= Exp(6.4237)
= $616.30
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 49.46% per annum.
- INTU price at the close of May 20, 2024 was $670.15 and was inside the primary price channel.
Secondary Trend
Start date: January 23, 2024
End date: May 20, 2024
a = 6.9223
b = -0.0003
s = 0.0225
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -9.09%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0225) – 1
= 9.40%
January 23, 2024 calculations
Top border of price channel:
Exp(Y1,176)
= Exp(a + b × X1,176 + 2 × s)
= Exp(a + b × 1,708 + 2 × s)
= Exp(6.9223 + -0.0003 × 1,708 + 2 × 0.0225)
= Exp(6.5213)
= $679.47
Bottom border of price channel:
Exp(Y1,176)
= Exp(a + b × X1,176 – 2 × s)
= Exp(a + b × 1,708 – 2 × s)
= Exp(6.9223 + -0.0003 × 1,708 – 2 × 0.0225)
= Exp(6.4315)
= $621.08
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(6.9223 + -0.0003 × 1,826 + 2 × 0.0225)
= Exp(6.4905)
= $658.86
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.9223 + -0.0003 × 1,826 – 2 × 0.0225)
= Exp(6.4006)
= $602.24
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 9.09% per annum.
- INTU price at the close of May 20, 2024 was higher than the top border of the secondary price channel by $11.29 (1.71%). 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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