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 48.68% per annum.
- BKNG price at the close of February 20, 2025 was $5,018.23 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 22.83% per annum.
- BKNG 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 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: February 20, 2025
a = 6.5530
b = 0.0011
s = 0.0713
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 48.68%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0713) – 1
= 33.03%
June 16, 2022 calculations
Top border of price channel:
Exp(Y585)
= Exp(a + b × X585 + 2 × s)
= Exp(a + b × 846 + 2 × s)
= Exp(6.5530 + 0.0011 × 846 + 2 × 0.0713)
= Exp(7.6150)
= $2,028.49
Bottom border of price channel:
Exp(Y585)
= Exp(a + b × X585 – 2 × s)
= Exp(a + b × 846 – 2 × s)
= Exp(6.5530 + 0.0011 × 846 – 2 × 0.0713)
= Exp(7.3296)
= $1,524.85
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(6.5530 + 0.0011 × 1,826 + 2 × 0.0713)
= Exp(8.6800)
= $5,883.95
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.5530 + 0.0011 × 1,826 – 2 × 0.0713)
= Exp(8.3946)
= $4,423.06
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 48.68% per annum.
- BKNG price at the close of February 20, 2025 was $5,018.23 and was inside the primary price channel.
Secondary Trend
Start date: November 11, 2024
End date: February 20, 2025
a = 9.7729
b = -0.0007
s = 0.0305
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0007) – 1
= -22.83%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0305) – 1
= 13.00%
November 11, 2024 calculations
Top border of price channel:
Exp(Y1,189)
= Exp(a + b × X1,189 + 2 × s)
= Exp(a + b × 1,725 + 2 × s)
= Exp(9.7729 + -0.0007 × 1,725 + 2 × 0.0305)
= Exp(8.6090)
= $5,480.65
Bottom border of price channel:
Exp(Y1,189)
= Exp(a + b × X1,189 – 2 × s)
= Exp(a + b × 1,725 – 2 × s)
= Exp(9.7729 + -0.0007 × 1,725 – 2 × 0.0305)
= Exp(8.4868)
= $4,850.32
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(9.7729 + -0.0007 × 1,826 + 2 × 0.0305)
= Exp(8.5373)
= $5,101.32
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.7729 + -0.0007 × 1,826 – 2 × 0.0305)
= Exp(8.4151)
= $4,514.61
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 22.83% per annum.
- BKNG 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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