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 64.52% per annum.
- HUM price at the close of May 17, 2024 was $356.20 and was higher than the top border of the primary price channel by $36.08 (11.27%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1,623.10% per annum.
- HUM 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 HUM 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 9, 2023
End date: May 6, 2024
a = 10.8527
b = -0.0028
s = 0.0473
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0028) – 1
= -64.52%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0473) – 1
= 20.82%
October 9, 2023 calculations
Top border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 + 2 × s)
= Exp(a + b × 1,603 + 2 × s)
= Exp(10.8527 + -0.0028 × 1,603 + 2 × 0.0473)
= Exp(6.3962)
= $599.53
Bottom border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 – 2 × s)
= Exp(a + b × 1,603 – 2 × s)
= Exp(10.8527 + -0.0028 × 1,603 – 2 × 0.0473)
= Exp(6.2070)
= $496.23
May 6, 2024 calculations
Top border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 + 2 × s)
= Exp(a + b × 1,813 + 2 × s)
= Exp(10.8527 + -0.0028 × 1,813 + 2 × 0.0473)
= Exp(5.7999)
= $330.28
Bottom border of price channel:
Exp(Y1,249)
= Exp(a + b × X1,249 – 2 × s)
= Exp(a + b × 1,813 – 2 × s)
= Exp(10.8527 + -0.0028 × 1,813 – 2 × 0.0473)
= Exp(5.6108)
= $273.37
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 64.52% per annum.
- HUM price at the close of May 17, 2024 was $356.20 and was higher than the top border of the primary price channel by $36.08 (11.27%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 26, 2024
End date: May 17, 2024
a = -8.3581
b = 0.0078
s = 0.0139
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0078) – 1
= 1,623.10%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0139) – 1
= 5.72%
April 26, 2024 calculations
Top border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 + 2 × s)
= Exp(a + b × 1,803 + 2 × s)
= Exp(-8.3581 + 0.0078 × 1,803 + 2 × 0.0139)
= Exp(5.7317)
= $308.49
Bottom border of price channel:
Exp(Y1,243)
= Exp(a + b × X1,243 – 2 × s)
= Exp(a + b × 1,803 – 2 × s)
= Exp(-8.3581 + 0.0078 × 1,803 – 2 × 0.0139)
= Exp(5.6761)
= $291.81
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(-8.3581 + 0.0078 × 1,824 + 2 × 0.0139)
= Exp(5.8955)
= $363.39
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(-8.3581 + 0.0078 × 1,824 – 2 × 0.0139)
= Exp(5.8399)
= $343.74
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 1,623.10% per annum.
- HUM 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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