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 135.39% per annum.
- GILD price at the close of November 19, 2024 was $87.75 and was lower than the bottom border of the primary price channel by $2.20 (2.44%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 82.17% per annum.
- GILD 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 GILD 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: May 23, 2024
End date: November 14, 2024
a = 0.2655
b = 0.0023
s = 0.0245
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0023) – 1
= 135.39%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0245) – 1
= 10.29%
May 23, 2024 calculations
Top border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 + 2 × s)
= Exp(a + b × 1,646 + 2 × s)
= Exp(0.2655 + 0.0023 × 1,646 + 2 × 0.0245)
= Exp(4.1750)
= $65.04
Bottom border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 – 2 × s)
= Exp(a + b × 1,646 – 2 × s)
= Exp(0.2655 + 0.0023 × 1,646 – 2 × 0.0245)
= Exp(4.0770)
= $58.97
November 14, 2024 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(0.2655 + 0.0023 × 1,821 + 2 × 0.0245)
= Exp(4.5855)
= $98.05
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(0.2655 + 0.0023 × 1,821 – 2 × 0.0245)
= Exp(4.4875)
= $88.90
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 135.39% per annum.
- GILD price at the close of November 19, 2024 was $87.75 and was lower than the bottom border of the primary price channel by $2.20 (2.44%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 5, 2024
End date: November 19, 2024
a = 13.1162
b = -0.0047
s = 0.0338
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0047) – 1
= -82.17%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0338) – 1
= 14.47%
November 5, 2024 calculations
Top border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 + 2 × s)
= Exp(a + b × 1,812 + 2 × s)
= Exp(13.1162 + -0.0047 × 1,812 + 2 × 0.0338)
= Exp(4.6251)
= $102.01
Bottom border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 – 2 × s)
= Exp(a + b × 1,812 – 2 × s)
= Exp(13.1162 + -0.0047 × 1,812 – 2 × 0.0338)
= Exp(4.4899)
= $89.11
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(13.1162 + -0.0047 × 1,826 + 2 × 0.0338)
= Exp(4.5589)
= $95.48
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(13.1162 + -0.0047 × 1,826 – 2 × 0.0338)
= Exp(4.4238)
= $83.41
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 82.17% per annum.
- GILD 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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