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 5.87% per annum.
- MO price at the close of May 20, 2024 was $45.90 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 219.10% per annum.
- MO 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 MO 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 12, 2021
End date: May 6, 2024
a = 4.0314
b = -0.0002
s = 0.0569
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -5.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0569) – 1
= 25.56%
March 12, 2021 calculations
Top border of price channel:
Exp(Y456)
= Exp(a + b × X456 + 2 × s)
= Exp(a + b × 661 + 2 × s)
= Exp(4.0314 + -0.0002 × 661 + 2 × 0.0569)
= Exp(4.0357)
= $56.58
Bottom border of price channel:
Exp(Y456)
= Exp(a + b × X456 – 2 × s)
= Exp(a + b × 661 – 2 × s)
= Exp(4.0314 + -0.0002 × 661 – 2 × 0.0569)
= Exp(3.8081)
= $45.06
May 6, 2024 calculations
Top border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 + 2 × s)
= Exp(a + b × 1,812 + 2 × s)
= Exp(4.0314 + -0.0002 × 1,812 + 2 × 0.0569)
= Exp(3.8449)
= $46.75
Bottom border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 – 2 × s)
= Exp(a + b × 1,812 – 2 × s)
= Exp(4.0314 + -0.0002 × 1,812 – 2 × 0.0569)
= Exp(3.6173)
= $37.24
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.87% per annum.
- MO price at the close of May 20, 2024 was $45.90 and was inside the primary price channel.
Secondary Trend
Start date: April 11, 2024
End date: May 20, 2024
a = -1.9697
b = 0.0032
s = 0.0102
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0032) – 1
= 219.10%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0102) – 1
= 4.15%
April 11, 2024 calculations
Top border of price channel:
Exp(Y1,231)
= Exp(a + b × X1,231 + 2 × s)
= Exp(a + b × 1,787 + 2 × s)
= Exp(-1.9697 + 0.0032 × 1,787 + 2 × 0.0102)
= Exp(3.7315)
= $41.74
Bottom border of price channel:
Exp(Y1,231)
= Exp(a + b × X1,231 – 2 × s)
= Exp(a + b × 1,787 – 2 × s)
= Exp(-1.9697 + 0.0032 × 1,787 – 2 × 0.0102)
= Exp(3.6908)
= $40.08
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(-1.9697 + 0.0032 × 1,826 + 2 × 0.0102)
= Exp(3.8555)
= $47.25
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-1.9697 + 0.0032 × 1,826 – 2 × 0.0102)
= Exp(3.8148)
= $45.37
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 219.10% per annum.
- MO 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.
Check out MO and 1,499 other stocks on our new website