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 74.51% per annum.
- ADBE price at the close of January 17, 2025 was $429.99 and was lower than the bottom border of the primary price channel by $478.57 (52.67%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 8.95% per annum.
- ADBE price at the close of January 17, 2025 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 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: August 26, 2022
End date: February 15, 2024
a = 4.2064
b = 0.0015
s = 0.0878
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 74.51%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0878) – 1
= 42.07%
August 26, 2022 calculations
Top border of price channel:
Exp(Y656)
= Exp(a + b × X656 + 2 × s)
= Exp(a + b × 948 + 2 × s)
= Exp(4.2064 + 0.0015 × 948 + 2 × 0.0878)
= Exp(5.8281)
= $339.73
Bottom border of price channel:
Exp(Y656)
= Exp(a + b × X656 – 2 × s)
= Exp(a + b × 948 – 2 × s)
= Exp(4.2064 + 0.0015 × 948 – 2 × 0.0878)
= Exp(5.4770)
= $239.13
February 15, 2024 calculations
Top border of price channel:
Exp(Y1,025)
= Exp(a + b × X1,025 + 2 × s)
= Exp(a + b × 1,486 + 2 × s)
= Exp(4.2064 + 0.0015 × 1,486 + 2 × 0.0878)
= Exp(6.6489)
= $771.92
Bottom border of price channel:
Exp(Y1,025)
= Exp(a + b × X1,025 – 2 × s)
= Exp(a + b × 1,486 – 2 × s)
= Exp(4.2064 + 0.0015 × 1,486 – 2 × 0.0878)
= Exp(6.2978)
= $543.35
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 74.51% per annum.
- ADBE price at the close of January 17, 2025 was $429.99 and was lower than the bottom border of the primary price channel by $478.57 (52.67%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 11, 2023
End date: January 17, 2025
a = 6.6665
b = -0.0003
s = 0.0837
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -8.95%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0837) – 1
= 39.75%
July 11, 2023 calculations
Top border of price channel:
Exp(Y873)
= Exp(a + b × X873 + 2 × s)
= Exp(a + b × 1,267 + 2 × s)
= Exp(6.6665 + -0.0003 × 1,267 + 2 × 0.0837)
= Exp(6.5086)
= $670.88
Bottom border of price channel:
Exp(Y873)
= Exp(a + b × X873 – 2 × s)
= Exp(a + b × 1,267 – 2 × s)
= Exp(6.6665 + -0.0003 × 1,267 – 2 × 0.0837)
= Exp(6.1739)
= $480.06
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(6.6665 + -0.0003 × 1,823 + 2 × 0.0837)
= Exp(6.3659)
= $581.64
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(6.6665 + -0.0003 × 1,823 – 2 × 0.0837)
= Exp(6.0312)
= $416.20
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 8.95% per annum.
- ADBE price at the close of January 17, 2025 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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