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 March 27, 2025 was $208.94 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 87.63% per annum.
- ADI price at the close of March 27, 2025 was higher than the top border of the secondary price channel by $4.57 (2.24%). 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 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 = 5.9178
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(Y1,044)
= Exp(a + b × X1,044 + 2 × s)
= Exp(a + b × 1,514 + 2 × s)
= Exp(5.9178 + -0.0003 × 1,514 + 2 × 0.0314)
= Exp(5.5018)
= $245.14
Bottom border of price channel:
Exp(Y1,044)
= Exp(a + b × X1,044 – 2 × s)
= Exp(a + b × 1,514 – 2 × s)
= Exp(5.9178 + -0.0003 × 1,514 – 2 × 0.0314)
= Exp(5.3764)
= $216.24
February 18, 2025 calculations
Top border of price channel:
Exp(Y1,228)
= Exp(a + b × X1,228 + 2 × s)
= Exp(a + b × 1,786 + 2 × s)
= Exp(5.9178 + -0.0003 × 1,786 + 2 × 0.0314)
= Exp(5.4158)
= $224.94
Bottom border of price channel:
Exp(Y1,228)
= Exp(a + b × X1,228 – 2 × s)
= Exp(a + b × 1,786 – 2 × s)
= Exp(5.9178 + -0.0003 × 1,786 – 2 × 0.0314)
= Exp(5.2904)
= $198.42
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 10.90% per annum.
- ADI price at the close of March 27, 2025 was $208.94 and was inside the primary price channel.
Secondary Trend
Start date: February 19, 2025
End date: March 21, 2025
a = 15.7173
b = -0.0057
s = 0.0198
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0057) – 1
= -87.63%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0198) – 1
= 8.22%
February 19, 2025 calculations
Top border of price channel:
Exp(Y1,229)
= Exp(a + b × X1,229 + 2 × s)
= Exp(a + b × 1,787 + 2 × s)
= Exp(15.7173 + -0.0057 × 1,787 + 2 × 0.0198)
= Exp(5.5260)
= $251.14
Bottom border of price channel:
Exp(Y1,229)
= Exp(a + b × X1,229 – 2 × s)
= Exp(a + b × 1,787 – 2 × s)
= Exp(15.7173 + -0.0057 × 1,787 – 2 × 0.0198)
= Exp(5.4470)
= $232.06
March 21, 2025 calculations
Top border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 + 2 × s)
= Exp(a + b × 1,817 + 2 × s)
= Exp(15.7173 + -0.0057 × 1,817 + 2 × 0.0198)
= Exp(5.3543)
= $211.51
Bottom border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 – 2 × s)
= Exp(a + b × 1,817 – 2 × s)
= Exp(15.7173 + -0.0057 × 1,817 – 2 × 0.0198)
= Exp(5.2753)
= $195.44
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 87.63% per annum.
- ADI price at the close of March 27, 2025 was higher than the top border of the secondary price channel by $4.57 (2.24%). 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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