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 1.53% per annum.
- HON price at the close of January 17, 2025 was $222.58 and was higher than the top border of the primary price channel by $13.12 (6.26%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 15.69% per annum.
- HON 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 HON 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 9, 2020
End date: May 9, 2024
a = 5.2963
b = 0.0000
s = 0.0626
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -1.53%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0626) – 1
= 28.45%
November 9, 2020 calculations
Top border of price channel:
Exp(Y204)
= Exp(a + b × X204 + 2 × s)
= Exp(a + b × 293 + 2 × s)
= Exp(5.2963 + 0.0000 × 293 + 2 × 0.0626)
= Exp(5.4091)
= $223.44
Bottom border of price channel:
Exp(Y204)
= Exp(a + b × X204 – 2 × s)
= Exp(a + b × 293 – 2 × s)
= Exp(5.2963 + 0.0000 × 293 – 2 × 0.0626)
= Exp(5.1588)
= $173.95
May 9, 2024 calculations
Top border of price channel:
Exp(Y1,083)
= Exp(a + b × X1,083 + 2 × s)
= Exp(a + b × 1,570 + 2 × s)
= Exp(5.2963 + 0.0000 × 1,570 + 2 × 0.0626)
= Exp(5.3552)
= $211.71
Bottom border of price channel:
Exp(Y1,083)
= Exp(a + b × X1,083 – 2 × s)
= Exp(a + b × 1,570 – 2 × s)
= Exp(5.2963 + 0.0000 × 1,570 – 2 × 0.0626)
= Exp(5.1049)
= $164.82
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.53% per annum.
- HON price at the close of January 17, 2025 was $222.58 and was higher than the top border of the primary price channel by $13.12 (6.26%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: August 1, 2023
End date: January 17, 2025
a = 4.6752
b = 0.0004
s = 0.0345
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0004) – 1
= 15.69%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0345) – 1
= 14.80%
August 1, 2023 calculations
Top border of price channel:
Exp(Y888)
= Exp(a + b × X888 + 2 × s)
= Exp(a + b × 1,288 + 2 × s)
= Exp(4.6752 + 0.0004 × 1,288 + 2 × 0.0345)
= Exp(5.2585)
= $192.19
Bottom border of price channel:
Exp(Y888)
= Exp(a + b × X888 – 2 × s)
= Exp(a + b × 1,288 – 2 × s)
= Exp(4.6752 + 0.0004 × 1,288 – 2 × 0.0345)
= Exp(5.1205)
= $167.42
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(4.6752 + 0.0004 × 1,823 + 2 × 0.0345)
= Exp(5.4721)
= $237.96
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(4.6752 + 0.0004 × 1,823 – 2 × 0.0345)
= Exp(5.3341)
= $207.29
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 15.69% per annum.
- HON 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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