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 1.55% per annum.
- ELV price at the close of May 20, 2024 was $541.62 and was higher than the top border of the primary price channel by $31.47 (6.17%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.38% per annum.
- ELV 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 ELV 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 15, 2021
End date: February 6, 2024
a = 6.2166
b = 0.0000
s = 0.0481
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -1.55%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0481) – 1
= 21.23%
December 15, 2021 calculations
Top border of price channel:
Exp(Y649)
= Exp(a + b × X649 + 2 × s)
= Exp(a + b × 939 + 2 × s)
= Exp(6.2166 + 0.0000 × 939 + 2 × 0.0481)
= Exp(6.2727)
= $529.90
Bottom border of price channel:
Exp(Y649)
= Exp(a + b × X649 – 2 × s)
= Exp(a + b × 939 – 2 × s)
= Exp(6.2166 + 0.0000 × 939 – 2 × 0.0481)
= Exp(6.0802)
= $437.10
February 6, 2024 calculations
Top border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 + 2 × s)
= Exp(a + b × 1,722 + 2 × s)
= Exp(6.2166 + 0.0000 × 1,722 + 2 × 0.0481)
= Exp(6.2392)
= $512.43
Bottom border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 – 2 × s)
= Exp(a + b × 1,722 – 2 × s)
= Exp(6.2166 + 0.0000 × 1,722 – 2 × 0.0481)
= Exp(6.0466)
= $422.68
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.55% per annum.
- ELV price at the close of May 20, 2024 was $541.62 and was higher than the top border of the primary price channel by $31.47 (6.17%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: August 31, 2023
End date: May 20, 2024
a = 4.8788
b = 0.0008
s = 0.0179
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 32.38%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0179) – 1
= 7.41%
August 31, 2023 calculations
Top border of price channel:
Exp(Y1,078)
= Exp(a + b × X1,078 + 2 × s)
= Exp(a + b × 1,563 + 2 × s)
= Exp(4.8788 + 0.0008 × 1,563 + 2 × 0.0179)
= Exp(6.1158)
= $452.96
Bottom border of price channel:
Exp(Y1,078)
= Exp(a + b × X1,078 – 2 × s)
= Exp(a + b × 1,563 – 2 × s)
= Exp(4.8788 + 0.0008 × 1,563 – 2 × 0.0179)
= Exp(6.0443)
= $421.71
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(4.8788 + 0.0008 × 1,826 + 2 × 0.0179)
= Exp(6.3179)
= $554.42
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.8788 + 0.0008 × 1,826 – 2 × 0.0179)
= Exp(6.2464)
= $516.17
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 32.38% per annum.
- ELV 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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