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 44.29% per annum.
- LIN price at the close of May 17, 2024 was $432.52 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 78.63% per annum.
- LIN price at the close of May 17, 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 LIN 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: March 11, 2024
End date: May 17, 2024
a = 8.9803
b = -0.0016
s = 0.0110
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0016) – 1
= -44.29%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0110) – 1
= 4.51%
March 11, 2024 calculations
Top border of price channel:
Exp(Y1,210)
= Exp(a + b × X1,210 + 2 × s)
= Exp(a + b × 1,757 + 2 × s)
= Exp(8.9803 + -0.0016 × 1,757 + 2 × 0.0110)
= Exp(6.1858)
= $485.83
Bottom border of price channel:
Exp(Y1,210)
= Exp(a + b × X1,210 – 2 × s)
= Exp(a + b × 1,757 – 2 × s)
= Exp(8.9803 + -0.0016 × 1,757 – 2 × 0.0110)
= Exp(6.1418)
= $464.87
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(8.9803 + -0.0016 × 1,824 + 2 × 0.0110)
= Exp(6.0784)
= $436.35
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(8.9803 + -0.0016 × 1,824 – 2 × 0.0110)
= Exp(6.0344)
= $417.53
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 44.29% per annum.
- LIN price at the close of May 17, 2024 was $432.52 and was inside the primary price channel.
Secondary Trend
Start date: May 2, 2024
End date: May 17, 2024
a = 3.1741
b = 0.0016
s = 0.0068
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 78.63%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0068) – 1
= 2.77%
May 2, 2024 calculations
Top border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 + 2 × s)
= Exp(a + b × 1,809 + 2 × s)
= Exp(3.1741 + 0.0016 × 1,809 + 2 × 0.0068)
= Exp(6.0631)
= $429.69
Bottom border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 – 2 × s)
= Exp(a + b × 1,809 – 2 × s)
= Exp(3.1741 + 0.0016 × 1,809 – 2 × 0.0068)
= Exp(6.0358)
= $418.12
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(3.1741 + 0.0016 × 1,824 + 2 × 0.0068)
= Exp(6.0869)
= $440.06
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.1741 + 0.0016 × 1,824 – 2 × 0.0068)
= Exp(6.0596)
= $428.21
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 78.63% per annum.
- LIN price at the close of May 17, 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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