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 9.44% per annum.
- CVX price at the close of May 17, 2024 was $162.67 and was higher than the top border of the primary price channel by $8.54 (5.54%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.99% per annum.
- CVX 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 CVX 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: October 18, 2022
End date: March 13, 2024
a = 5.4489
b = -0.0003
s = 0.0423
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -9.44%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0423) – 1
= 18.45%
October 18, 2022 calculations
Top border of price channel:
Exp(Y861)
= Exp(a + b × X861 + 2 × s)
= Exp(a + b × 1,247 + 2 × s)
= Exp(5.4489 + -0.0003 × 1,247 + 2 × 0.0423)
= Exp(5.1946)
= $180.30
Bottom border of price channel:
Exp(Y861)
= Exp(a + b × X861 – 2 × s)
= Exp(a + b × 1,247 – 2 × s)
= Exp(5.4489 + -0.0003 × 1,247 – 2 × 0.0423)
= Exp(5.0253)
= $152.22
March 13, 2024 calculations
Top border of price channel:
Exp(Y1,212)
= Exp(a + b × X1,212 + 2 × s)
= Exp(a + b × 1,759 + 2 × s)
= Exp(5.4489 + -0.0003 × 1,759 + 2 × 0.0423)
= Exp(5.0554)
= $156.87
Bottom border of price channel:
Exp(Y1,212)
= Exp(a + b × X1,212 – 2 × s)
= Exp(a + b × 1,759 – 2 × s)
= Exp(5.4489 + -0.0003 × 1,759 – 2 × 0.0423)
= Exp(4.8861)
= $132.44
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 9.44% per annum.
- CVX price at the close of May 17, 2024 was $162.67 and was higher than the top border of the primary price channel by $8.54 (5.54%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 27, 2023
End date: May 17, 2024
a = 3.6597
b = 0.0008
s = 0.0204
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 32.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0204) – 1
= 8.49%
October 27, 2023 calculations
Top border of price channel:
Exp(Y1,119)
= Exp(a + b × X1,119 + 2 × s)
= Exp(a + b × 1,621 + 2 × s)
= Exp(3.6597 + 0.0008 × 1,621 + 2 × 0.0204)
= Exp(4.9666)
= $143.54
Bottom border of price channel:
Exp(Y1,119)
= Exp(a + b × X1,119 – 2 × s)
= Exp(a + b × 1,621 – 2 × s)
= Exp(3.6597 + 0.0008 × 1,621 – 2 × 0.0204)
= Exp(4.8851)
= $132.30
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(3.6597 + 0.0008 × 1,824 + 2 × 0.0204)
= Exp(5.1252)
= $168.20
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.6597 + 0.0008 × 1,824 – 2 × 0.0204)
= Exp(5.0437)
= $155.04
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.99% per annum.
- CVX 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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