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 1.99% per annum.
- TXN price at the close of May 20, 2024 was $199.20 and was higher than the top border of the primary price channel by $20.71 (11.60%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1,204.15% per annum.
- TXN 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 TXN 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: February 8, 2021
End date: April 23, 2024
a = 5.1724
b = -0.0001
s = 0.0563
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -1.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0563) – 1
= 25.28%
February 8, 2021 calculations
Top border of price channel:
Exp(Y433)
= Exp(a + b × X433 + 2 × s)
= Exp(a + b × 629 + 2 × s)
= Exp(5.1724 + -0.0001 × 629 + 2 × 0.0563)
= Exp(5.2505)
= $190.65
Bottom border of price channel:
Exp(Y433)
= Exp(a + b × X433 – 2 × s)
= Exp(a + b × 629 – 2 × s)
= Exp(5.1724 + -0.0001 × 629 – 2 × 0.0563)
= Exp(5.0251)
= $152.18
April 23, 2024 calculations
Top border of price channel:
Exp(Y1,239)
= Exp(a + b × X1,239 + 2 × s)
= Exp(a + b × 1,799 + 2 × s)
= Exp(5.1724 + -0.0001 × 1,799 + 2 × 0.0563)
= Exp(5.1860)
= $178.76
Bottom border of price channel:
Exp(Y1,239)
= Exp(a + b × X1,239 – 2 × s)
= Exp(a + b × 1,799 – 2 × s)
= Exp(5.1724 + -0.0001 × 1,799 – 2 × 0.0563)
= Exp(4.9607)
= $142.69
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.99% per annum.
- TXN price at the close of May 20, 2024 was $199.20 and was higher than the top border of the primary price channel by $20.71 (11.60%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 30, 2024
End date: May 20, 2024
a = -7.5503
b = 0.0070
s = 0.0068
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0070) – 1
= 1,204.15%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0068) – 1
= 2.77%
April 30, 2024 calculations
Top border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 + 2 × s)
= Exp(a + b × 1,806 + 2 × s)
= Exp(-7.5503 + 0.0070 × 1,806 + 2 × 0.0068)
= Exp(5.1703)
= $175.97
Bottom border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 – 2 × s)
= Exp(a + b × 1,806 – 2 × s)
= Exp(-7.5503 + 0.0070 × 1,806 – 2 × 0.0068)
= Exp(5.1430)
= $171.23
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(-7.5503 + 0.0070 × 1,826 + 2 × 0.0068)
= Exp(5.3110)
= $202.56
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-7.5503 + 0.0070 × 1,826 – 2 × 0.0068)
= Exp(5.2837)
= $197.10
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1,204.15% per annum.
- TXN 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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