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 361.90% per annum.
- SMCI price at the close of May 17, 2024 was $887.89 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 82.79% per annum.
- SMCI 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 SMCI 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 28, 2022
End date: May 17, 2024
a = -0.9738
b = 0.0042
s = 0.2605
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0042) – 1
= 361.90%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.2605) – 1
= 183.53%
March 28, 2022 calculations
Top border of price channel:
Exp(Y720)
= Exp(a + b × X720 + 2 × s)
= Exp(a + b × 1,043 + 2 × s)
= Exp(-0.9738 + 0.0042 × 1,043 + 2 × 0.2605)
= Exp(3.9198)
= $50.39
Bottom border of price channel:
Exp(Y720)
= Exp(a + b × X720 – 2 × s)
= Exp(a + b × 1,043 – 2 × s)
= Exp(-0.9738 + 0.0042 × 1,043 – 2 × 0.2605)
= Exp(2.8777)
= $17.77
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(-0.9738 + 0.0042 × 1,824 + 2 × 0.2605)
= Exp(7.1940)
= $1,331.37
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(-0.9738 + 0.0042 × 1,824 – 2 × 0.2605)
= Exp(6.1518)
= $469.58
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 361.90% per annum.
- SMCI price at the close of May 17, 2024 was $887.89 and was inside the primary price channel.
Secondary Trend
Start date: March 4, 2024
End date: May 17, 2024
a = 15.4464
b = -0.0048
s = 0.0815
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0048) – 1
= -82.79%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0815) – 1
= 38.56%
March 4, 2024 calculations
Top border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 + 2 × s)
= Exp(a + b × 1,750 + 2 × s)
= Exp(15.4464 + -0.0048 × 1,750 + 2 × 0.0815)
= Exp(7.1726)
= $1,303.20
Bottom border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 – 2 × s)
= Exp(a + b × 1,750 – 2 × s)
= Exp(15.4464 + -0.0048 × 1,750 – 2 × 0.0815)
= Exp(6.8464)
= $940.50
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(15.4464 + -0.0048 × 1,824 + 2 × 0.0815)
= Exp(6.8158)
= $912.16
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(15.4464 + -0.0048 × 1,824 – 2 × 0.0815)
= Exp(6.4897)
= $658.29
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 82.79% per annum.
- SMCI 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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