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 41.33% per annum.
- ADBE price at the close of April 25, 2025 was $367.72 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 81.07% per annum.
- ADBE price at the close of April 25, 2025 was higher than the top border of the secondary price channel by $3.62 (1.00%). This indicates a possible reversal in the secondary trend direction.
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 ADBE 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: June 28, 2024
End date: April 25, 2025
a = 8.6106
b = -0.0015
s = 0.0597
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0015) – 1
= -41.33%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0597) – 1
= 26.96%
June 28, 2024 calculations
Top border of price channel:
Exp(Y1,050)
= Exp(a + b × X1,050 + 2 × s)
= Exp(a + b × 1,523 + 2 × s)
= Exp(8.6106 + -0.0015 × 1,523 + 2 × 0.0597)
= Exp(6.5046)
= $668.21
Bottom border of price channel:
Exp(Y1,050)
= Exp(a + b × X1,050 – 2 × s)
= Exp(a + b × 1,523 – 2 × s)
= Exp(8.6106 + -0.0015 × 1,523 – 2 × 0.0597)
= Exp(6.2659)
= $526.33
April 25, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(8.6106 + -0.0015 × 1,824 + 2 × 0.0597)
= Exp(6.0648)
= $430.44
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(8.6106 + -0.0015 × 1,824 – 2 × 0.0597)
= Exp(5.8261)
= $339.04
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 41.33% per annum.
- ADBE price at the close of April 25, 2025 was $367.72 and was inside the primary price channel.
Secondary Trend
Start date: February 11, 2025
End date: April 25, 2025
a = 14.1435
b = -0.0046
s = 0.0361
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0046) – 1
= -81.07%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0361) – 1
= 15.54%
February 11, 2025 calculations
Top border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 + 2 × s)
= Exp(a + b × 1,751 + 2 × s)
= Exp(14.1435 + -0.0046 × 1,751 + 2 × 0.0361)
= Exp(6.2303)
= $507.93
Bottom border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 – 2 × s)
= Exp(a + b × 1,751 – 2 × s)
= Exp(14.1435 + -0.0046 × 1,751 – 2 × 0.0361)
= Exp(6.0859)
= $439.62
April 25, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(14.1435 + -0.0046 × 1,824 + 2 × 0.0361)
= Exp(5.8974)
= $364.10
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(14.1435 + -0.0046 × 1,824 – 2 × 0.0361)
= Exp(5.7530)
= $315.13
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 81.07% per annum.
- ADBE price at the close of April 25, 2025 was higher than the top border of the secondary price channel by $3.62 (1.00%). 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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