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 49.13% per annum.
- BKNG price at the close of January 17, 2025 was $4,926.80 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 50.45% per annum.
- BKNG price at the close of January 17, 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 16, 2022
End date: January 17, 2025
a = 6.5095
b = 0.0011
s = 0.0720
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 49.13%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0720) – 1
= 33.40%
June 16, 2022 calculations
Top border of price channel:
Exp(Y607)
= Exp(a + b × X607 + 2 × s)
= Exp(a + b × 877 + 2 × s)
= Exp(6.5095 + 0.0011 × 877 + 2 × 0.0720)
= Exp(7.6138)
= $2,025.96
Bottom border of price channel:
Exp(Y607)
= Exp(a + b × X607 – 2 × s)
= Exp(a + b × 877 – 2 × s)
= Exp(6.5095 + 0.0011 × 877 – 2 × 0.0720)
= Exp(7.3256)
= $1,518.73
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(6.5095 + 0.0011 × 1,823 + 2 × 0.0720)
= Exp(8.6496)
= $5,707.73
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(6.5095 + 0.0011 × 1,823 – 2 × 0.0720)
= Exp(8.3614)
= $4,278.72
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 49.13% per annum.
- BKNG price at the close of January 17, 2025 was $4,926.80 and was inside the primary price channel.
Secondary Trend
Start date: November 26, 2024
End date: January 17, 2025
a = 11.9846
b = -0.0019
s = 0.0150
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0019) – 1
= -50.45%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0150) – 1
= 6.20%
November 26, 2024 calculations
Top border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 + 2 × s)
= Exp(a + b × 1,771 + 2 × s)
= Exp(11.9846 + -0.0019 × 1,771 + 2 × 0.0150)
= Exp(8.6072)
= $5,470.99
Bottom border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 – 2 × s)
= Exp(a + b × 1,771 – 2 × s)
= Exp(11.9846 + -0.0019 × 1,771 – 2 × 0.0150)
= Exp(8.5471)
= $5,151.56
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(11.9846 + -0.0019 × 1,823 + 2 × 0.0150)
= Exp(8.5072)
= $4,950.11
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(11.9846 + -0.0019 × 1,823 – 2 × 0.0150)
= Exp(8.4470)
= $4,661.10
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 50.45% per annum.
- BKNG price at the close of January 17, 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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