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 23.84% per annum.
- TGT price at the close of May 16, 2024 was $160.65 and was higher than the top border of the primary price channel by $31.17 (24.07%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 151.40% per annum.
- TGT price at the close of May 16, 2024 was lower than the bottom border of the secondary price channel by $10.56 (6.17%). This indicates a possible reversal in the secondary trend direction.
- 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 TGT 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 5, 2021
End date: December 12, 2023
a = 6.0021
b = -0.0007
s = 0.1120
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0007) – 1
= -23.84%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1120) – 1
= 56.52%
April 5, 2021 calculations
Top border of price channel:
Exp(Y473)
= Exp(a + b × X473 + 2 × s)
= Exp(a + b × 689 + 2 × s)
= Exp(6.0021 + -0.0007 × 689 + 2 × 0.1120)
= Exp(5.7120)
= $302.47
Bottom border of price channel:
Exp(Y473)
= Exp(a + b × X473 – 2 × s)
= Exp(a + b × 689 – 2 × s)
= Exp(6.0021 + -0.0007 × 689 – 2 × 0.1120)
= Exp(5.2640)
= $193.24
December 12, 2023 calculations
Top border of price channel:
Exp(Y1,151)
= Exp(a + b × X1,151 + 2 × s)
= Exp(a + b × 1,670 + 2 × s)
= Exp(6.0021 + -0.0007 × 1,670 + 2 × 0.1120)
= Exp(4.9800)
= $145.47
Bottom border of price channel:
Exp(Y1,151)
= Exp(a + b × X1,151 – 2 × s)
= Exp(a + b × 1,670 – 2 × s)
= Exp(6.0021 + -0.0007 × 1,670 – 2 × 0.1120)
= Exp(4.5319)
= $92.94
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 23.84% per annum.
- TGT price at the close of May 16, 2024 was $160.65 and was higher than the top border of the primary price channel by $31.17 (24.07%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: September 21, 2023
End date: April 23, 2024
a = 0.6294
b = 0.0025
s = 0.0492
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0025) – 1
= 151.40%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0492) – 1
= 21.75%
September 21, 2023 calculations
Top border of price channel:
Exp(Y1,094)
= Exp(a + b × X1,094 + 2 × s)
= Exp(a + b × 1,588 + 2 × s)
= Exp(0.6294 + 0.0025 × 1,588 + 2 × 0.0492)
= Exp(4.7386)
= $114.28
Bottom border of price channel:
Exp(Y1,094)
= Exp(a + b × X1,094 – 2 × s)
= Exp(a + b × 1,588 – 2 × s)
= Exp(0.6294 + 0.0025 × 1,588 – 2 × 0.0492)
= Exp(4.5418)
= $93.86
April 23, 2024 calculations
Top border of price channel:
Exp(Y1,241)
= Exp(a + b × X1,241 + 2 × s)
= Exp(a + b × 1,803 + 2 × s)
= Exp(0.6294 + 0.0025 × 1,803 + 2 × 0.0492)
= Exp(5.2816)
= $196.69
Bottom border of price channel:
Exp(Y1,241)
= Exp(a + b × X1,241 – 2 × s)
= Exp(a + b × 1,803 – 2 × s)
= Exp(0.6294 + 0.0025 × 1,803 – 2 × 0.0492)
= Exp(5.0848)
= $161.55
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 151.40% per annum.
- TGT price at the close of May 16, 2024 was lower than the bottom border of the secondary price channel by $10.56 (6.17%). This indicates a possible reversal in the secondary trend direction.
- 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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