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 35.08% per annum.
- ADBE price at the close of February 20, 2025 was $454.69 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 146.71% per annum.
- ADBE price at the close of February 20, 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: June 27, 2024
End date: February 20, 2025
a = 8.2395
b = -0.0012
s = 0.0514
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0012) – 1
= -35.08%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0514) – 1
= 22.82%
June 27, 2024 calculations
Top border of price channel:
Exp(Y1,094)
= Exp(a + b × X1,094 + 2 × s)
= Exp(a + b × 1,588 + 2 × s)
= Exp(8.2395 + -0.0012 × 1,588 + 2 × 0.0514)
= Exp(6.4625)
= $640.65
Bottom border of price channel:
Exp(Y1,094)
= Exp(a + b × X1,094 – 2 × s)
= Exp(a + b × 1,588 – 2 × s)
= Exp(8.2395 + -0.0012 × 1,588 – 2 × 0.0514)
= Exp(6.2569)
= $521.60
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(8.2395 + -0.0012 × 1,826 + 2 × 0.0514)
= Exp(6.1807)
= $483.35
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.2395 + -0.0012 × 1,826 – 2 × 0.0514)
= Exp(5.9752)
= $393.53
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 35.08% per annum.
- ADBE price at the close of February 20, 2025 was $454.69 and was inside the primary price channel.
Secondary Trend
Start date: January 7, 2025
End date: February 20, 2025
a = 1.6182
b = 0.0025
s = 0.0168
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0025) – 1
= 146.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0168) – 1
= 6.96%
January 7, 2025 calculations
Top border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 + 2 × s)
= Exp(a + b × 1,782 + 2 × s)
= Exp(1.6182 + 0.0025 × 1,782 + 2 × 0.0168)
= Exp(6.0607)
= $428.67
Bottom border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 – 2 × s)
= Exp(a + b × 1,782 – 2 × s)
= Exp(1.6182 + 0.0025 × 1,782 – 2 × 0.0168)
= Exp(5.9934)
= $400.76
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(1.6182 + 0.0025 × 1,826 + 2 × 0.0168)
= Exp(6.1695)
= $477.96
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(1.6182 + 0.0025 × 1,826 – 2 × 0.0168)
= Exp(6.1022)
= $446.85
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 146.71% per annum.
- ADBE price at the close of February 20, 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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