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 140.50% per annum.
- CRWD price at the close of November 19, 2024 was $353.29 and was lower than the bottom border of the primary price channel by $80.17 (18.50%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 9.04% per annum.
- CRWD price at the close of November 19, 2024 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 CRWD 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: November 30, 2022
End date: July 18, 2024
a = 1.8790
b = 0.0024
s = 0.0987
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0024) – 1
= 140.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0987) – 1
= 48.39%
November 30, 2022 calculations
Top border of price channel:
Exp(Y762)
= Exp(a + b × X762 + 2 × s)
= Exp(a + b × 1,106 + 2 × s)
= Exp(1.8790 + 0.0024 × 1,106 + 2 × 0.0987)
= Exp(4.7354)
= $113.91
Bottom border of price channel:
Exp(Y762)
= Exp(a + b × X762 – 2 × s)
= Exp(a + b × 1,106 – 2 × s)
= Exp(1.8790 + 0.0024 × 1,106 – 2 × 0.0987)
= Exp(4.3407)
= $76.76
July 18, 2024 calculations
Top border of price channel:
Exp(Y1,170)
= Exp(a + b × X1,170 + 2 × s)
= Exp(a + b × 1,702 + 2 × s)
= Exp(1.8790 + 0.0024 × 1,702 + 2 × 0.0987)
= Exp(6.1683)
= $477.39
Bottom border of price channel:
Exp(Y1,170)
= Exp(a + b × X1,170 – 2 × s)
= Exp(a + b × 1,702 – 2 × s)
= Exp(1.8790 + 0.0024 × 1,702 – 2 × 0.0987)
= Exp(5.7737)
= $321.72
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 140.50% per annum.
- CRWD price at the close of November 19, 2024 was $353.29 and was lower than the bottom border of the primary price channel by $80.17 (18.50%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 9, 2024
End date: November 18, 2024
a = 6.1596
b = -0.0003
s = 0.1249
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -9.04%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1249) – 1
= 64.80%
January 9, 2024 calculations
Top border of price channel:
Exp(Y1,039)
= Exp(a + b × X1,039 + 2 × s)
= Exp(a + b × 1,511 + 2 × s)
= Exp(6.1596 + -0.0003 × 1,511 + 2 × 0.1249)
= Exp(6.0172)
= $410.42
Bottom border of price channel:
Exp(Y1,039)
= Exp(a + b × X1,039 – 2 × s)
= Exp(a + b × 1,511 – 2 × s)
= Exp(6.1596 + -0.0003 × 1,511 – 2 × 0.1249)
= Exp(5.5176)
= $249.04
November 18, 2024 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(6.1596 + -0.0003 × 1,825 + 2 × 0.1249)
= Exp(5.9357)
= $378.30
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(6.1596 + -0.0003 × 1,825 – 2 × 0.1249)
= Exp(5.4361)
= $229.55
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 9.04% per annum.
- CRWD price at the close of November 19, 2024 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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