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 73.29% per annum.
- MPC price at the close of May 16, 2024 was $174.77 and was lower than the bottom border of the primary price channel by $24.19 (12.16%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 54.16% per annum.
- MPC price at the close of May 16, 2024 was inside the secondary price channel.
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 MPC 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 25, 2020
End date: April 24, 2023
a = 2.7596
b = 0.0015
s = 0.1084
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 73.29%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1084) – 1
= 54.30%
March 25, 2020 calculations
Top border of price channel:
Exp(Y215)
= Exp(a + b × X215 + 2 × s)
= Exp(a + b × 313 + 2 × s)
= Exp(2.7596 + 0.0015 × 313 + 2 × 0.1084)
= Exp(3.4479)
= $31.43
Bottom border of price channel:
Exp(Y215)
= Exp(a + b × X215 – 2 × s)
= Exp(a + b × 313 – 2 × s)
= Exp(2.7596 + 0.0015 × 313 – 2 × 0.1084)
= Exp(3.0142)
= $20.37
April 24, 2023 calculations
Top border of price channel:
Exp(Y990)
= Exp(a + b × X990 + 2 × s)
= Exp(a + b × 1,438 + 2 × s)
= Exp(2.7596 + 0.0015 × 1,438 + 2 × 0.1084)
= Exp(5.1424)
= $171.12
Bottom border of price channel:
Exp(Y990)
= Exp(a + b × X990 – 2 × s)
= Exp(a + b × 1,438 – 2 × s)
= Exp(2.7596 + 0.0015 × 1,438 – 2 × 0.1084)
= Exp(4.7087)
= $110.91
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 73.29% per annum.
- MPC price at the close of May 16, 2024 was $174.77 and was lower than the bottom border of the primary price channel by $24.19 (12.16%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: February 3, 2021
End date: May 16, 2024
a = 3.0892
b = 0.0012
s = 0.0852
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 54.16%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0852) – 1
= 40.58%
February 3, 2021 calculations
Top border of price channel:
Exp(Y432)
= Exp(a + b × X432 + 2 × s)
= Exp(a + b × 628 + 2 × s)
= Exp(3.0892 + 0.0012 × 628 + 2 × 0.0852)
= Exp(4.0042)
= $54.83
Bottom border of price channel:
Exp(Y432)
= Exp(a + b × X432 – 2 × s)
= Exp(a + b × 628 – 2 × s)
= Exp(3.0892 + 0.0012 × 628 – 2 × 0.0852)
= Exp(3.6635)
= $39.00
May 16, 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(3.0892 + 0.0012 × 1,826 + 2 × 0.0852)
= Exp(5.4247)
= $226.93
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.0892 + 0.0012 × 1,826 – 2 × 0.0852)
= Exp(5.0840)
= $161.43
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 54.16% per annum.
- MPC price at the close of May 16, 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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