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 66.74% per annum.
- NOW price at the close of May 16, 2024 was $758.01 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.13% per annum.
- NOW 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 NOW 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 22, 2022
End date: April 17, 2024
a = 4.1675
b = 0.0014
s = 0.0583
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0014) – 1
= 66.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0583) – 1
= 26.24%
September 22, 2022 calculations
Top border of price channel:
Exp(Y844)
= Exp(a + b × X844 + 2 × s)
= Exp(a + b × 1,224 + 2 × s)
= Exp(4.1675 + 0.0014 × 1,224 + 2 × 0.0583)
= Exp(5.9984)
= $402.79
Bottom border of price channel:
Exp(Y844)
= Exp(a + b × X844 – 2 × s)
= Exp(a + b × 1,224 – 2 × s)
= Exp(4.1675 + 0.0014 × 1,224 – 2 × 0.0583)
= Exp(5.7654)
= $319.07
April 17, 2024 calculations
Top border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 + 2 × s)
= Exp(a + b × 1,797 + 2 × s)
= Exp(4.1675 + 0.0014 × 1,797 + 2 × 0.0583)
= Exp(6.8010)
= $898.75
Bottom border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 – 2 × s)
= Exp(a + b × 1,797 – 2 × s)
= Exp(4.1675 + 0.0014 × 1,797 – 2 × 0.0583)
= Exp(6.5680)
= $711.93
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 66.74% per annum.
- NOW price at the close of May 16, 2024 was $758.01 and was inside the primary price channel.
Secondary Trend
Start date: January 24, 2024
End date: May 14, 2024
a = 8.0312
b = -0.0008
s = 0.0241
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.13%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0241) – 1
= 10.13%
January 24, 2024 calculations
Top border of price channel:
Exp(Y1,179)
= Exp(a + b × X1,179 + 2 × s)
= Exp(a + b × 1,713 + 2 × s)
= Exp(8.0312 + -0.0008 × 1,713 + 2 × 0.0241)
= Exp(6.7215)
= $830.02
Bottom border of price channel:
Exp(Y1,179)
= Exp(a + b × X1,179 – 2 × s)
= Exp(a + b × 1,713 – 2 × s)
= Exp(8.0312 + -0.0008 × 1,713 – 2 × 0.0241)
= Exp(6.6249)
= $753.65
May 14, 2024 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(8.0312 + -0.0008 × 1,824 + 2 × 0.0241)
= Exp(6.6335)
= $760.10
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(8.0312 + -0.0008 × 1,824 – 2 × 0.0241)
= Exp(6.5369)
= $690.17
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.13% per annum.
- NOW 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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