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 80.84% per annum.
- CSCO price at the close of November 19, 2024 was $57.01 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 148.81% per annum.
- CSCO price at the close of November 19, 2024 was lower than the bottom border of the secondary price channel by $0.13 (0.23%). This indicates a possible reversal in the secondary trend direction.
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 CSCO 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 5, 2024
End date: November 19, 2024
a = 1.0822
b = 0.0016
s = 0.0303
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 80.84%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0303) – 1
= 12.87%
June 5, 2024 calculations
Top border of price channel:
Exp(Y1,141)
= Exp(a + b × X1,141 + 2 × s)
= Exp(a + b × 1,659 + 2 × s)
= Exp(1.0822 + 0.0016 × 1,659 + 2 × 0.0303)
= Exp(3.8354)
= $46.31
Bottom border of price channel:
Exp(Y1,141)
= Exp(a + b × X1,141 – 2 × s)
= Exp(a + b × 1,659 – 2 × s)
= Exp(1.0822 + 0.0016 × 1,659 – 2 × 0.0303)
= Exp(3.7143)
= $41.03
November 19, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(1.0822 + 0.0016 × 1,826 + 2 × 0.0303)
= Exp(4.1064)
= $60.73
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(1.0822 + 0.0016 × 1,826 – 2 × 0.0303)
= Exp(3.9853)
= $53.80
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 80.84% per annum.
- CSCO price at the close of November 19, 2024 was $57.01 and was inside the primary price channel.
Secondary Trend
Start date: September 4, 2024
End date: November 19, 2024
a = -0.4797
b = 0.0025
s = 0.0174
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0025) – 1
= 148.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0174) – 1
= 7.21%
September 4, 2024 calculations
Top border of price channel:
Exp(Y1,203)
= Exp(a + b × X1,203 + 2 × s)
= Exp(a + b × 1,750 + 2 × s)
= Exp(-0.4797 + 0.0025 × 1,750 + 2 × 0.0174)
= Exp(3.9253)
= $50.67
Bottom border of price channel:
Exp(Y1,203)
= Exp(a + b × X1,203 – 2 × s)
= Exp(a + b × 1,750 – 2 × s)
= Exp(-0.4797 + 0.0025 × 1,750 – 2 × 0.0174)
= Exp(3.8557)
= $47.26
November 19, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(-0.4797 + 0.0025 × 1,826 + 2 × 0.0174)
= Exp(4.1151)
= $61.26
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-0.4797 + 0.0025 × 1,826 – 2 × 0.0174)
= Exp(4.0455)
= $57.14
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 148.81% per annum.
- CSCO price at the close of November 19, 2024 was lower than the bottom border of the secondary price channel by $0.13 (0.23%). 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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