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 8.33% per annum.
- ADI price at the close of November 19, 2024 was $210.43 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 19.36% per annum.
- ADI price at the close of November 19, 2024 was inside the secondary price channel.
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: December 1, 2020
End date: May 3, 2024
a = 4.8741
b = 0.0002
s = 0.0698
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 8.33%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0698) – 1
= 32.21%
December 1, 2020 calculations
Top border of price channel:
Exp(Y259)
= Exp(a + b × X259 + 2 × s)
= Exp(a + b × 377 + 2 × s)
= Exp(4.8741 + 0.0002 × 377 + 2 × 0.0698)
= Exp(5.0964)
= $163.44
Bottom border of price channel:
Exp(Y259)
= Exp(a + b × X259 – 2 × s)
= Exp(a + b × 377 – 2 × s)
= Exp(4.8741 + 0.0002 × 377 – 2 × 0.0698)
= Exp(4.8172)
= $123.62
May 3, 2024 calculations
Top border of price channel:
Exp(Y1,119)
= Exp(a + b × X1,119 + 2 × s)
= Exp(a + b × 1,626 + 2 × s)
= Exp(4.8741 + 0.0002 × 1,626 + 2 × 0.0698)
= Exp(5.3703)
= $214.93
Bottom border of price channel:
Exp(Y1,119)
= Exp(a + b × X1,119 – 2 × s)
= Exp(a + b × 1,626 – 2 × s)
= Exp(4.8741 + 0.0002 × 1,626 – 2 × 0.0698)
= Exp(5.0911)
= $162.56
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 8.33% per annum.
- ADI price at the close of November 19, 2024 was $210.43 and was inside the primary price channel.
Secondary Trend
Start date: April 8, 2022
End date: November 14, 2024
a = 4.5379
b = 0.0005
s = 0.0671
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 19.36%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0671) – 1
= 30.80%
April 8, 2022 calculations
Top border of price channel:
Exp(Y600)
= Exp(a + b × X600 + 2 × s)
= Exp(a + b × 870 + 2 × s)
= Exp(4.5379 + 0.0005 × 870 + 2 × 0.0671)
= Exp(5.0940)
= $163.04
Bottom border of price channel:
Exp(Y600)
= Exp(a + b × X600 – 2 × s)
= Exp(a + b × 870 – 2 × s)
= Exp(4.5379 + 0.0005 × 870 – 2 × 0.0671)
= Exp(4.8255)
= $124.65
November 14, 2024 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(4.5379 + 0.0005 × 1,821 + 2 × 0.0671)
= Exp(5.5551)
= $258.56
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(4.5379 + 0.0005 × 1,821 – 2 × 0.0671)
= Exp(5.2867)
= $197.68
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 19.36% per annum.
- ADI price at the close of November 19, 2024 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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