Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 16.77% per annum.
- CDNS price at the close of February 20, 2025 was $270.23 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 40.48% per annum.
- CDNS price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $17.14 (5.97%). This indicates a possible reversal in the secondary trend direction.
- 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 CDNS 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: January 16, 2024
End date: November 1, 2024
a = 6.4505
b = -0.0005
s = 0.0547
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0005) – 1
= -16.77%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0547) – 1
= 24.44%
January 16, 2024 calculations
Top border of price channel:
Exp(Y981)
= Exp(a + b × X981 + 2 × s)
= Exp(a + b × 1,425 + 2 × s)
= Exp(6.4505 + -0.0005 × 1,425 + 2 × 0.0547)
= Exp(5.8431)
= $344.85
Bottom border of price channel:
Exp(Y981)
= Exp(a + b × X981 – 2 × s)
= Exp(a + b × 1,425 – 2 × s)
= Exp(6.4505 + -0.0005 × 1,425 – 2 × 0.0547)
= Exp(5.6245)
= $277.12
November 1, 2024 calculations
Top border of price channel:
Exp(Y1,183)
= Exp(a + b × X1,183 + 2 × s)
= Exp(a + b × 1,715 + 2 × s)
= Exp(6.4505 + -0.0005 × 1,715 + 2 × 0.0547)
= Exp(5.6972)
= $298.04
Bottom border of price channel:
Exp(Y1,183)
= Exp(a + b × X1,183 – 2 × s)
= Exp(a + b × 1,715 – 2 × s)
= Exp(6.4505 + -0.0005 × 1,715 – 2 × 0.0547)
= Exp(5.4786)
= $239.51
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 16.77% per annum.
- CDNS price at the close of February 20, 2025 was $270.23 and was inside the primary price channel.
Secondary Trend
Start date: July 24, 2024
End date: February 18, 2025
a = 4.0511
b = 0.0009
s = 0.0454
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 40.48%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0454) – 1
= 19.90%
July 24, 2024 calculations
Top border of price channel:
Exp(Y1,112)
= Exp(a + b × X1,112 + 2 × s)
= Exp(a + b × 1,615 + 2 × s)
= Exp(4.0511 + 0.0009 × 1,615 + 2 × 0.0454)
= Exp(5.6458)
= $283.09
Bottom border of price channel:
Exp(Y1,112)
= Exp(a + b × X1,112 – 2 × s)
= Exp(a + b × 1,615 – 2 × s)
= Exp(4.0511 + 0.0009 × 1,615 – 2 × 0.0454)
= Exp(5.4643)
= $236.11
February 18, 2025 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.0511 + 0.0009 × 1,824 + 2 × 0.0454)
= Exp(5.8404)
= $343.91
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.0511 + 0.0009 × 1,824 – 2 × 0.0454)
= Exp(5.6589)
= $286.84
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 40.48% per annum.
- CDNS price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $17.14 (5.97%). This indicates a possible reversal in the secondary trend direction.
- 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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