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 32.55% per annum.
- ON price at the close of May 20, 2024 was $74.28 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 326.84% per annum.
- ON 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 ON 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: June 6, 2023
End date: May 20, 2024
a = 6.1829
b = -0.0011
s = 0.0887
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0011) – 1
= -32.55%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0887) – 1
= 42.62%
June 6, 2023 calculations
Top border of price channel:
Exp(Y1,018)
= Exp(a + b × X1,018 + 2 × s)
= Exp(a + b × 1,477 + 2 × s)
= Exp(6.1829 + -0.0011 × 1,477 + 2 × 0.0887)
= Exp(4.7668)
= $117.54
Bottom border of price channel:
Exp(Y1,018)
= Exp(a + b × X1,018 – 2 × s)
= Exp(a + b × 1,477 – 2 × s)
= Exp(6.1829 + -0.0011 × 1,477 – 2 × 0.0887)
= Exp(4.4118)
= $82.42
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(6.1829 + -0.0011 × 1,826 + 2 × 0.0887)
= Exp(4.3902)
= $80.66
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.1829 + -0.0011 × 1,826 – 2 × 0.0887)
= Exp(4.0352)
= $56.56
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 32.55% per annum.
- ON price at the close of May 20, 2024 was $74.28 and was inside the primary price channel.
Secondary Trend
Start date: April 24, 2024
End date: May 20, 2024
a = -2.9486
b = 0.0040
s = 0.0145
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0040) – 1
= 326.84%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0145) – 1
= 5.97%
April 24, 2024 calculations
Top border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 + 2 × s)
= Exp(a + b × 1,800 + 2 × s)
= Exp(-2.9486 + 0.0040 × 1,800 + 2 × 0.0145)
= Exp(4.2372)
= $69.21
Bottom border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 – 2 × s)
= Exp(a + b × 1,800 – 2 × s)
= Exp(-2.9486 + 0.0040 × 1,800 – 2 × 0.0145)
= Exp(4.1792)
= $65.31
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(-2.9486 + 0.0040 × 1,826 + 2 × 0.0145)
= Exp(4.3405)
= $76.75
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-2.9486 + 0.0040 × 1,826 – 2 × 0.0145)
= Exp(4.2825)
= $72.42
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 326.84% per annum.
- ON 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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