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 10.90% per annum.
- ADI price at the close of February 20, 2025 was $243.82 and was higher than the top border of the primary price channel by $18.03 (7.99%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 2,030.21% per annum.
- ADI 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 ADI 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: May 22, 2024
End date: February 18, 2025
a = 5.9341
b = -0.0003
s = 0.0314
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -10.90%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0314) – 1
= 13.37%
May 22, 2024 calculations
Top border of price channel:
Exp(Y1,070)
= Exp(a + b × X1,070 + 2 × s)
= Exp(a + b × 1,552 + 2 × s)
= Exp(5.9341 + -0.0003 × 1,552 + 2 × 0.0314)
= Exp(5.5062)
= $246.22
Bottom border of price channel:
Exp(Y1,070)
= Exp(a + b × X1,070 – 2 × s)
= Exp(a + b × 1,552 – 2 × s)
= Exp(5.9341 + -0.0003 × 1,552 – 2 × 0.0314)
= Exp(5.3807)
= $217.18
February 18, 2025 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(5.9341 + -0.0003 × 1,824 + 2 × 0.0314)
= Exp(5.4202)
= $225.93
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(5.9341 + -0.0003 × 1,824 – 2 × 0.0314)
= Exp(5.2948)
= $199.29
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 10.90% per annum.
- ADI price at the close of February 20, 2025 was $243.82 and was higher than the top border of the primary price channel by $18.03 (7.99%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: February 3, 2025
End date: February 20, 2025
a = -9.8639
b = 0.0084
s = 0.0398
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0084) – 1
= 2,030.21%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0398) – 1
= 17.23%
February 3, 2025 calculations
Top border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 + 2 × s)
= Exp(a + b × 1,809 + 2 × s)
= Exp(-9.8639 + 0.0084 × 1,809 + 2 × 0.0398)
= Exp(5.3756)
= $216.06
Bottom border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 – 2 × s)
= Exp(a + b × 1,809 – 2 × s)
= Exp(-9.8639 + 0.0084 × 1,809 – 2 × 0.0398)
= Exp(5.2166)
= $184.30
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(-9.8639 + 0.0084 × 1,826 + 2 × 0.0398)
= Exp(5.5180)
= $249.14
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-9.8639 + 0.0084 × 1,826 – 2 × 0.0398)
= Exp(5.3590)
= $212.52
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 2,030.21% per annum.
- ADI 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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