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 233.81% per annum.
- NVDA price at the close of May 20, 2024 was $947.80 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 0.28% per annum.
- NVDA 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 NVDA 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 1, 2022
End date: May 20, 2024
a = 0.8579
b = 0.0033
s = 0.1312
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0033) – 1
= 233.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1312) – 1
= 68.98%
September 1, 2022 calculations
Top border of price channel:
Exp(Y828)
= Exp(a + b × X828 + 2 × s)
= Exp(a + b × 1,199 + 2 × s)
= Exp(0.8579 + 0.0033 × 1,199 + 2 × 0.1312)
= Exp(5.0799)
= $160.75
Bottom border of price channel:
Exp(Y828)
= Exp(a + b × X828 – 2 × s)
= Exp(a + b × 1,199 – 2 × s)
= Exp(0.8579 + 0.0033 × 1,199 – 2 × 0.1312)
= Exp(4.5552)
= $95.13
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(0.8579 + 0.0033 × 1,826 + 2 × 0.1312)
= Exp(7.1505)
= $1,274.80
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(0.8579 + 0.0033 × 1,826 – 2 × 0.1312)
= Exp(6.6259)
= $754.39
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 233.81% per annum.
- NVDA price at the close of May 20, 2024 was $947.80 and was inside the primary price channel.
Secondary Trend
Start date: March 4, 2024
End date: May 20, 2024
a = 6.7965
b = 0.0000
s = 0.0456
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -0.28%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0456) – 1
= 20.01%
March 4, 2024 calculations
Top border of price channel:
Exp(Y1,204)
= Exp(a + b × X1,204 + 2 × s)
= Exp(a + b × 1,749 + 2 × s)
= Exp(6.7965 + 0.0000 × 1,749 + 2 × 0.0456)
= Exp(6.8744)
= $967.23
Bottom border of price channel:
Exp(Y1,204)
= Exp(a + b × X1,204 – 2 × s)
= Exp(a + b × 1,749 – 2 × s)
= Exp(6.7965 + 0.0000 × 1,749 – 2 × 0.0456)
= Exp(6.6920)
= $805.95
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(6.7965 + 0.0000 × 1,826 + 2 × 0.0456)
= Exp(6.8739)
= $966.67
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.7965 + 0.0000 × 1,826 – 2 × 0.0456)
= Exp(6.6914)
= $805.48
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 0.28% per annum.
- NVDA 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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