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 January 17, 2025 was $305.60 and was higher than the top border of the primary price channel by $18.88 (6.58%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 49.50% per annum.
- CDNS 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 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 = 6.4661
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(Y1,003)
= Exp(a + b × X1,003 + 2 × s)
= Exp(a + b × 1,456 + 2 × s)
= Exp(6.4661 + -0.0005 × 1,456 + 2 × 0.0547)
= Exp(5.8431)
= $344.85
Bottom border of price channel:
Exp(Y1,003)
= Exp(a + b × X1,003 – 2 × s)
= Exp(a + b × 1,456 – 2 × s)
= Exp(6.4661 + -0.0005 × 1,456 – 2 × 0.0547)
= Exp(5.6245)
= $277.12
November 1, 2024 calculations
Top border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 + 2 × s)
= Exp(a + b × 1,746 + 2 × s)
= Exp(6.4661 + -0.0005 × 1,746 + 2 × 0.0547)
= Exp(5.6972)
= $298.04
Bottom border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 – 2 × s)
= Exp(a + b × 1,746 – 2 × s)
= Exp(6.4661 + -0.0005 × 1,746 – 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 January 17, 2025 was $305.60 and was higher than the top border of the primary price channel by $18.88 (6.58%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 24, 2024
End date: January 17, 2025
a = 3.7307
b = 0.0011
s = 0.0447
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 49.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0447) – 1
= 19.60%
July 24, 2024 calculations
Top border of price channel:
Exp(Y1,134)
= Exp(a + b × X1,134 + 2 × s)
= Exp(a + b × 1,646 + 2 × s)
= Exp(3.7307 + 0.0011 × 1,646 + 2 × 0.0447)
= Exp(5.6335)
= $279.65
Bottom border of price channel:
Exp(Y1,134)
= Exp(a + b × X1,134 – 2 × s)
= Exp(a + b × 1,646 – 2 × s)
= Exp(3.7307 + 0.0011 × 1,646 – 2 × 0.0447)
= Exp(5.4546)
= $233.83
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(3.7307 + 0.0011 × 1,823 + 2 × 0.0447)
= Exp(5.8285)
= $339.86
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(3.7307 + 0.0011 × 1,823 – 2 × 0.0447)
= Exp(5.6496)
= $284.17
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 49.50% per annum.
- CDNS 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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