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 48.40% per annum.
- BKNG price at the close of March 28, 2025 was $4,634.24 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 22.95% per annum.
- BKNG price at the close of March 28, 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 BKNG 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 14, 2022
End date: March 6, 2025
a = 6.5988
b = 0.0011
s = 0.0711
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 48.40%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0711) – 1
= 32.92%
June 14, 2022 calculations
Top border of price channel:
Exp(Y557)
= Exp(a + b × X557 + 2 × s)
= Exp(a + b × 806 + 2 × s)
= Exp(6.5988 + 0.0011 × 806 + 2 × 0.0711)
= Exp(7.6127)
= $2,023.78
Bottom border of price channel:
Exp(Y557)
= Exp(a + b × X557 – 2 × s)
= Exp(a + b × 806 – 2 × s)
= Exp(6.5988 + 0.0011 × 806 – 2 × 0.0711)
= Exp(7.3282)
= $1,522.60
March 6, 2025 calculations
Top border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 + 2 × s)
= Exp(a + b × 1,802 + 2 × s)
= Exp(6.5988 + 0.0011 × 1,802 + 2 × 0.0711)
= Exp(8.6898)
= $5,942.23
Bottom border of price channel:
Exp(Y1,240)
= Exp(a + b × X1,240 – 2 × s)
= Exp(a + b × 1,802 – 2 × s)
= Exp(6.5988 + 0.0011 × 1,802 – 2 × 0.0711)
= Exp(8.4053)
= $4,470.66
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 48.40% per annum.
- BKNG price at the close of March 28, 2025 was $4,634.24 and was inside the primary price channel.
Secondary Trend
Start date: November 6, 2024
End date: March 28, 2025
a = 9.7489
b = -0.0007
s = 0.0351
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0007) – 1
= -22.95%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0351) – 1
= 15.07%
November 6, 2024 calculations
Top border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 + 2 × s)
= Exp(a + b × 1,682 + 2 × s)
= Exp(9.7489 + -0.0007 × 1,682 + 2 × 0.0351)
= Exp(8.6175)
= $5,527.64
Bottom border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 – 2 × s)
= Exp(a + b × 1,682 – 2 × s)
= Exp(9.7489 + -0.0007 × 1,682 – 2 × 0.0351)
= Exp(8.4771)
= $4,803.73
March 28, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.7489 + -0.0007 × 1,824 + 2 × 0.0351)
= Exp(8.5161)
= $4,994.43
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.7489 + -0.0007 × 1,824 – 2 × 0.0351)
= Exp(8.3757)
= $4,340.36
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 22.95% per annum.
- BKNG price at the close of March 28, 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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