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 96.75% per annum.
- AVGO price at the close of April 2, 2025 was $172.09 and was lower than the bottom border of the primary price channel by $38.42 (18.25%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 68.92% per annum.
- AVGO price at the close of April 2, 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 AVGO 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: August 29, 2022
End date: February 26, 2025
a = 2.1222
b = 0.0019
s = 0.0783
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 96.75%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0783) – 1
= 36.78%
August 29, 2022 calculations
Top border of price channel:
Exp(Y605)
= Exp(a + b × X605 + 2 × s)
= Exp(a + b × 878 + 2 × s)
= Exp(2.1222 + 0.0019 × 878 + 2 × 0.0783)
= Exp(3.9068)
= $49.74
Bottom border of price channel:
Exp(Y605)
= Exp(a + b × X605 – 2 × s)
= Exp(a + b × 878 – 2 × s)
= Exp(2.1222 + 0.0019 × 878 – 2 × 0.0783)
= Exp(3.5936)
= $36.36
February 26, 2025 calculations
Top border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 + 2 × s)
= Exp(a + b × 1,790 + 2 × s)
= Exp(2.1222 + 0.0019 × 1,790 + 2 × 0.0783)
= Exp(5.5978)
= $269.84
Bottom border of price channel:
Exp(Y1,230)
= Exp(a + b × X1,230 – 2 × s)
= Exp(a + b × 1,790 – 2 × s)
= Exp(2.1222 + 0.0019 × 1,790 – 2 × 0.0783)
= Exp(5.2846)
= $197.28
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 96.75% per annum.
- AVGO price at the close of April 2, 2025 was $172.09 and was lower than the bottom border of the primary price channel by $38.42 (18.25%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: December 23, 2024
End date: April 2, 2025
a = 11.0402
b = -0.0032
s = 0.0565
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0032) – 1
= -68.92%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0565) – 1
= 25.37%
December 23, 2024 calculations
Top border of price channel:
Exp(Y1,188)
= Exp(a + b × X1,188 + 2 × s)
= Exp(a + b × 1,725 + 2 × s)
= Exp(11.0402 + -0.0032 × 1,725 + 2 × 0.0565)
= Exp(5.6299)
= $278.63
Bottom border of price channel:
Exp(Y1,188)
= Exp(a + b × X1,188 – 2 × s)
= Exp(a + b × 1,725 – 2 × s)
= Exp(11.0402 + -0.0032 × 1,725 – 2 × 0.0565)
= Exp(5.4038)
= $222.24
April 2, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(11.0402 + -0.0032 × 1,825 + 2 × 0.0565)
= Exp(5.3097)
= $202.29
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(11.0402 + -0.0032 × 1,825 – 2 × 0.0565)
= Exp(5.0836)
= $161.35
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 68.92% per annum.
- AVGO price at the close of April 2, 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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