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 64.18% per annum.
- LULU price at the close of May 20, 2024 was $327.07 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 20.42% per annum.
- LULU price at the close of May 20, 2024 was lower than the bottom border of the secondary price channel by $0.68 (0.21%).
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 LULU 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: December 11, 2023
End date: May 20, 2024
a = 10.9708
b = -0.0028
s = 0.0576
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0028) – 1
= -64.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0576) – 1
= 25.89%
December 11, 2023 calculations
Top border of price channel:
Exp(Y1,148)
= Exp(a + b × X1,148 + 2 × s)
= Exp(a + b × 1,665 + 2 × s)
= Exp(10.9708 + -0.0028 × 1,665 + 2 × 0.0576)
= Exp(6.4022)
= $603.17
Bottom border of price channel:
Exp(Y1,148)
= Exp(a + b × X1,148 – 2 × s)
= Exp(a + b × 1,665 – 2 × s)
= Exp(10.9708 + -0.0028 × 1,665 – 2 × 0.0576)
= Exp(6.1719)
= $479.11
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(10.9708 + -0.0028 × 1,826 + 2 × 0.0576)
= Exp(5.9493)
= $383.48
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(10.9708 + -0.0028 × 1,826 – 2 × 0.0576)
= Exp(5.7190)
= $304.61
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 64.18% per annum.
- LULU price at the close of May 20, 2024 was $327.07 and was inside the primary price channel.
Secondary Trend
Start date: April 4, 2024
End date: May 20, 2024
a = 6.9890
b = -0.0006
s = 0.0270
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0006) – 1
= -20.42%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0270) – 1
= 11.41%
April 4, 2024 calculations
Top border of price channel:
Exp(Y1,226)
= Exp(a + b × X1,226 + 2 × s)
= Exp(a + b × 1,780 + 2 × s)
= Exp(6.9890 + -0.0006 × 1,780 + 2 × 0.0270)
= Exp(5.9291)
= $375.81
Bottom border of price channel:
Exp(Y1,226)
= Exp(a + b × X1,226 – 2 × s)
= Exp(a + b × 1,780 – 2 × s)
= Exp(6.9890 + -0.0006 × 1,780 – 2 × 0.0270)
= Exp(5.8210)
= $337.33
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(6.9890 + -0.0006 × 1,826 + 2 × 0.0270)
= Exp(5.9003)
= $365.14
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.9890 + -0.0006 × 1,826 – 2 × 0.0270)
= Exp(5.7923)
= $327.75
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 20.42% per annum.
- LULU price at the close of May 20, 2024 was lower than the bottom border of the secondary price channel by $0.68 (0.21%).
- 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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