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 59.75% per annum.
- CRM price at the close of May 20, 2024 was $287.07 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 43.79% per annum.
- CRM 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 CRM 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: September 15, 2022
End date: May 20, 2024
a = 3.3812
b = 0.0013
s = 0.0814
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 59.75%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0814) – 1
= 38.50%
September 15, 2022 calculations
Top border of price channel:
Exp(Y837)
= Exp(a + b × X837 + 2 × s)
= Exp(a + b × 1,213 + 2 × s)
= Exp(3.3812 + 0.0013 × 1,213 + 2 × 0.0814)
= Exp(5.1009)
= $164.16
Bottom border of price channel:
Exp(Y837)
= Exp(a + b × X837 – 2 × s)
= Exp(a + b × 1,213 – 2 × s)
= Exp(3.3812 + 0.0013 × 1,213 – 2 × 0.0814)
= Exp(4.7751)
= $118.53
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(3.3812 + 0.0013 × 1,826 + 2 × 0.0814)
= Exp(5.8876)
= $360.53
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.3812 + 0.0013 × 1,826 – 2 × 0.0814)
= Exp(5.5619)
= $260.31
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 59.75% per annum.
- CRM price at the close of May 20, 2024 was $287.07 and was inside the primary price channel.
Secondary Trend
Start date: February 26, 2024
End date: May 20, 2024
a = 8.4891
b = -0.0016
s = 0.0298
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0016) – 1
= -43.79%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0298) – 1
= 12.64%
February 26, 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(8.4891 + -0.0016 × 1,742 + 2 × 0.0298)
= Exp(5.7988)
= $329.92
Bottom border of price channel:
Exp(Y1,199)
= Exp(a + b × X1,199 – 2 × s)
= Exp(a + b × 1,742 – 2 × s)
= Exp(8.4891 + -0.0016 × 1,742 – 2 × 0.0298)
= Exp(5.6798)
= $292.89
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(8.4891 + -0.0016 × 1,826 + 2 × 0.0298)
= Exp(5.6662)
= $288.95
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.4891 + -0.0016 × 1,826 – 2 × 0.0298)
= Exp(5.5472)
= $256.52
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 43.79% per annum.
- CRM 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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