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 55.79% per annum.
- VZ price at the close of May 17, 2024 was $40.06 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 4.86% per annum.
- VZ price at the close of May 17, 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 VZ 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: July 14, 2023
End date: April 19, 2024
a = 1.5583
b = 0.0012
s = 0.0438
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 55.79%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0438) – 1
= 19.14%
July 14, 2023 calculations
Top border of price channel:
Exp(Y1,045)
= Exp(a + b × X1,045 + 2 × s)
= Exp(a + b × 1,516 + 2 × s)
= Exp(1.5583 + 0.0012 × 1,516 + 2 × 0.0438)
= Exp(3.4873)
= $32.70
Bottom border of price channel:
Exp(Y1,045)
= Exp(a + b × X1,045 – 2 × s)
= Exp(a + b × 1,516 – 2 × s)
= Exp(1.5583 + 0.0012 × 1,516 – 2 × 0.0438)
= Exp(3.3121)
= $27.44
April 19, 2024 calculations
Top border of price channel:
Exp(Y1,238)
= Exp(a + b × X1,238 + 2 × s)
= Exp(a + b × 1,796 + 2 × s)
= Exp(1.5583 + 0.0012 × 1,796 + 2 × 0.0438)
= Exp(3.8274)
= $45.94
Bottom border of price channel:
Exp(Y1,238)
= Exp(a + b × X1,238 – 2 × s)
= Exp(a + b × 1,796 – 2 × s)
= Exp(1.5583 + 0.0012 × 1,796 – 2 × 0.0438)
= Exp(3.6522)
= $38.56
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 55.79% per annum.
- VZ price at the close of May 17, 2024 was $40.06 and was inside the primary price channel.
Secondary Trend
Start date: January 23, 2024
End date: May 17, 2024
a = 3.9316
b = -0.0001
s = 0.0215
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -4.86%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0215) – 1
= 8.99%
January 23, 2024 calculations
Top border of price channel:
Exp(Y1,177)
= Exp(a + b × X1,177 + 2 × s)
= Exp(a + b × 1,709 + 2 × s)
= Exp(3.9316 + -0.0001 × 1,709 + 2 × 0.0215)
= Exp(3.7415)
= $42.16
Bottom border of price channel:
Exp(Y1,177)
= Exp(a + b × X1,177 – 2 × s)
= Exp(a + b × 1,709 – 2 × s)
= Exp(3.9316 + -0.0001 × 1,709 – 2 × 0.0215)
= Exp(3.6554)
= $38.68
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(3.9316 + -0.0001 × 1,824 + 2 × 0.0215)
= Exp(3.7259)
= $41.51
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.9316 + -0.0001 × 1,824 – 2 × 0.0215)
= Exp(3.6398)
= $38.08
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 4.86% per annum.
- VZ price at the close of May 17, 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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