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 160.63% per annum.
- META price at the close of May 20, 2024 was $468.84 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.35% per annum.
- META 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 META 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 23, 2022
End date: May 20, 2024
a = 1.5452
b = 0.0026
s = 0.1270
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0026) – 1
= 160.63%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1270) – 1
= 66.21%
September 23, 2022 calculations
Top border of price channel:
Exp(Y843)
= Exp(a + b × X843 + 2 × s)
= Exp(a + b × 1,221 + 2 × s)
= Exp(1.5452 + 0.0026 × 1,221 + 2 × 0.1270)
= Exp(5.0037)
= $148.97
Bottom border of price channel:
Exp(Y843)
= Exp(a + b × X843 – 2 × s)
= Exp(a + b × 1,221 – 2 × s)
= Exp(1.5452 + 0.0026 × 1,221 – 2 × 0.1270)
= Exp(4.4956)
= $89.62
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(1.5452 + 0.0026 × 1,826 + 2 × 0.1270)
= Exp(6.5915)
= $728.88
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(1.5452 + 0.0026 × 1,826 – 2 × 0.1270)
= Exp(6.0834)
= $438.53
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 160.63% per annum.
- META price at the close of May 20, 2024 was $468.84 and was inside the primary price channel.
Secondary Trend
Start date: February 22, 2024
End date: May 20, 2024
a = 7.7475
b = -0.0009
s = 0.0413
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -27.35%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0413) – 1
= 17.96%
February 22, 2024 calculations
Top border of price channel:
Exp(Y1,197)
= Exp(a + b × X1,197 + 2 × s)
= Exp(a + b × 1,738 + 2 × s)
= Exp(7.7475 + -0.0009 × 1,738 + 2 × 0.0413)
= Exp(6.3089)
= $549.43
Bottom border of price channel:
Exp(Y1,197)
= Exp(a + b × X1,197 – 2 × s)
= Exp(a + b × 1,738 – 2 × s)
= Exp(7.7475 + -0.0009 × 1,738 – 2 × 0.0413)
= Exp(6.1437)
= $465.79
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(7.7475 + -0.0009 × 1,826 + 2 × 0.0413)
= Exp(6.2319)
= $508.70
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(7.7475 + -0.0009 × 1,826 – 2 × 0.0413)
= Exp(6.0667)
= $431.26
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.35% per annum.
- META 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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