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 20.38% per annum.
- NEM price at the close of May 16, 2024 was $42.84 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 340.33% per annum.
- NEM price at the close of May 16, 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 NEM 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: April 1, 2021
End date: April 24, 2024
a = 4.6873
b = -0.0006
s = 0.1260
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0006) – 1
= -20.38%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1260) – 1
= 65.51%
April 1, 2021 calculations
Top border of price channel:
Exp(Y472)
= Exp(a + b × X472 + 2 × s)
= Exp(a + b × 685 + 2 × s)
= Exp(4.6873 + -0.0006 × 685 + 2 × 0.1260)
= Exp(4.5115)
= $91.05
Bottom border of price channel:
Exp(Y472)
= Exp(a + b × X472 – 2 × s)
= Exp(a + b × 685 – 2 × s)
= Exp(4.6873 + -0.0006 × 685 – 2 × 0.1260)
= Exp(4.0076)
= $55.01
April 24, 2024 calculations
Top border of price channel:
Exp(Y1,242)
= Exp(a + b × X1,242 + 2 × s)
= Exp(a + b × 1,804 + 2 × s)
= Exp(4.6873 + -0.0006 × 1,804 + 2 × 0.1260)
= Exp(3.8127)
= $45.27
Bottom border of price channel:
Exp(Y1,242)
= Exp(a + b × X1,242 – 2 × s)
= Exp(a + b × 1,804 – 2 × s)
= Exp(4.6873 + -0.0006 × 1,804 – 2 × 0.1260)
= Exp(3.3088)
= $27.35
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 20.38% per annum.
- NEM price at the close of May 16, 2024 was $42.84 and was inside the primary price channel.
Secondary Trend
Start date: February 22, 2024
End date: May 16, 2024
a = -3.6389
b = 0.0041
s = 0.0318
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0041) – 1
= 340.33%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0318) – 1
= 13.54%
February 22, 2024 calculations
Top border of price channel:
Exp(Y1,199)
= Exp(a + b × X1,199 + 2 × s)
= Exp(a + b × 1,742 + 2 × s)
= Exp(-3.6389 + 0.0041 × 1,742 + 2 × 0.0318)
= Exp(3.4993)
= $33.09
Bottom border of price channel:
Exp(Y1,199)
= Exp(a + b × X1,199 – 2 × s)
= Exp(a + b × 1,742 – 2 × s)
= Exp(-3.6389 + 0.0041 × 1,742 – 2 × 0.0318)
= Exp(3.3723)
= $29.15
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(-3.6389 + 0.0041 × 1,826 + 2 × 0.0318)
= Exp(3.8404)
= $46.55
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-3.6389 + 0.0041 × 1,826 – 2 × 0.0318)
= Exp(3.7134)
= $40.99
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 340.33% per annum.
- NEM 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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