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 September 13, 2024 was $259.13 and was lower than the bottom border of the primary price channel by $109.84 (29.77%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 20.84% per annum.
- CRWD price at the close of September 13, 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 = 1.7227
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(Y809)
= Exp(a + b × X809 + 2 × s)
= Exp(a + b × 1,171 + 2 × s)
= Exp(1.7227 + 0.0024 × 1,171 + 2 × 0.0987)
= Exp(4.7354)
= $113.91
Bottom border of price channel:
Exp(Y809)
= Exp(a + b × X809 – 2 × s)
= Exp(a + b × 1,171 – 2 × s)
= Exp(1.7227 + 0.0024 × 1,171 – 2 × 0.0987)
= Exp(4.3407)
= $76.76
July 18, 2024 calculations
Top border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 + 2 × s)
= Exp(a + b × 1,767 + 2 × s)
= Exp(1.7227 + 0.0024 × 1,767 + 2 × 0.0987)
= Exp(6.1683)
= $477.39
Bottom border of price channel:
Exp(Y1,217)
= Exp(a + b × X1,217 – 2 × s)
= Exp(a + b × 1,767 – 2 × s)
= Exp(1.7227 + 0.0024 × 1,767 – 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 September 13, 2024 was $259.13 and was lower than the bottom border of the primary price channel by $109.84 (29.77%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: January 19, 2024
End date: September 13, 2024
a = 6.8258
b = -0.0006
s = 0.1328
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0006) – 1
= -20.84%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1328) – 1
= 70.11%
January 19, 2024 calculations
Top border of price channel:
Exp(Y1,093)
= Exp(a + b × X1,093 + 2 × s)
= Exp(a + b × 1,586 + 2 × s)
= Exp(6.8258 + -0.0006 × 1,586 + 2 × 0.1328)
= Exp(6.0759)
= $435.26
Bottom border of price channel:
Exp(Y1,093)
= Exp(a + b × X1,093 – 2 × s)
= Exp(a + b × 1,586 – 2 × s)
= Exp(6.8258 + -0.0006 × 1,586 – 2 × 0.1328)
= Exp(5.5447)
= $255.87
September 13, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(6.8258 + -0.0006 × 1,824 + 2 × 0.1328)
= Exp(5.9236)
= $373.74
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(6.8258 + -0.0006 × 1,824 – 2 × 0.1328)
= Exp(5.3923)
= $219.70
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 20.84% per annum.
- CRWD price at the close of September 13, 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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