Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 98.15% per annum.
- GE price at the close of May 17, 2024 was $159.89 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 375.00% per annum.
- GE price at the close of May 17, 2024 was lower than the bottom border of the secondary price channel by $3.62 (2.22%). This indicates a possible reversal in the secondary trend direction.
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 GE 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: June 10, 2022
End date: May 17, 2024
a = 1.5676
b = 0.0019
s = 0.0915
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 98.15%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0915) – 1
= 44.19%
June 10, 2022 calculations
Top border of price channel:
Exp(Y772)
= Exp(a + b × X772 + 2 × s)
= Exp(a + b × 1,117 + 2 × s)
= Exp(1.5676 + 0.0019 × 1,117 + 2 × 0.0915)
= Exp(3.8434)
= $46.69
Bottom border of price channel:
Exp(Y772)
= Exp(a + b × X772 – 2 × s)
= Exp(a + b × 1,117 – 2 × s)
= Exp(1.5676 + 0.0019 × 1,117 – 2 × 0.0915)
= Exp(3.4775)
= $32.38
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(1.5676 + 0.0019 × 1,824 + 2 × 0.0915)
= Exp(5.1681)
= $175.58
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(1.5676 + 0.0019 × 1,824 – 2 × 0.0915)
= Exp(4.8021)
= $121.77
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 98.15% per annum.
- GE price at the close of May 17, 2024 was $159.89 and was inside the primary price channel.
Secondary Trend
Start date: January 2, 2024
End date: May 17, 2024
a = -2.6299
b = 0.0043
s = 0.0298
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0043) – 1
= 375.00%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0298) – 1
= 12.68%
January 2, 2024 calculations
Top border of price channel:
Exp(Y1,163)
= Exp(a + b × X1,163 + 2 × s)
= Exp(a + b × 1,688 + 2 × s)
= Exp(-2.6299 + 0.0043 × 1,688 + 2 × 0.0298)
= Exp(4.6357)
= $103.10
Bottom border of price channel:
Exp(Y1,163)
= Exp(a + b × X1,163 – 2 × s)
= Exp(a + b × 1,688 – 2 × s)
= Exp(-2.6299 + 0.0043 × 1,688 – 2 × 0.0298)
= Exp(4.5163)
= $91.50
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(-2.6299 + 0.0043 × 1,824 + 2 × 0.0298)
= Exp(5.2163)
= $184.24
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(-2.6299 + 0.0043 × 1,824 – 2 × 0.0298)
= Exp(5.0969)
= $163.51
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 375.00% per annum.
- GE price at the close of May 17, 2024 was lower than the bottom border of the secondary price channel by $3.62 (2.22%). This indicates a possible reversal in the secondary trend direction.
- 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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