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 February 20, 2025 was $211.35 and was higher than the top border of the primary price channel by $2.19 (1.05%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 15.64% per annum.
- HON price at the close of February 20, 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 = 5.2950
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(Y182)
= Exp(a + b × X182 + 2 × s)
= Exp(a + b × 262 + 2 × s)
= Exp(5.2950 + 0.0000 × 262 + 2 × 0.0626)
= Exp(5.4091)
= $223.44
Bottom border of price channel:
Exp(Y182)
= Exp(a + b × X182 – 2 × s)
= Exp(a + b × 262 – 2 × s)
= Exp(5.2950 + 0.0000 × 262 – 2 × 0.0626)
= Exp(5.1588)
= $173.95
May 9, 2024 calculations
Top border of price channel:
Exp(Y1,061)
= Exp(a + b × X1,061 + 2 × s)
= Exp(a + b × 1,539 + 2 × s)
= Exp(5.2950 + 0.0000 × 1,539 + 2 × 0.0626)
= Exp(5.3552)
= $211.71
Bottom border of price channel:
Exp(Y1,061)
= Exp(a + b × X1,061 – 2 × s)
= Exp(a + b × 1,539 – 2 × s)
= Exp(5.2950 + 0.0000 × 1,539 – 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 February 20, 2025 was $211.35 and was higher than the top border of the primary price channel by $2.19 (1.05%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 31, 2023
End date: February 5, 2025
a = 4.6895
b = 0.0004
s = 0.0340
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0004) – 1
= 15.64%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0340) – 1
= 14.58%
July 31, 2023 calculations
Top border of price channel:
Exp(Y865)
= Exp(a + b × X865 + 2 × s)
= Exp(a + b × 1,256 + 2 × s)
= Exp(4.6895 + 0.0004 × 1,256 + 2 × 0.0340)
= Exp(5.2576)
= $192.02
Bottom border of price channel:
Exp(Y865)
= Exp(a + b × X865 – 2 × s)
= Exp(a + b × 1,256 – 2 × s)
= Exp(4.6895 + 0.0004 × 1,256 – 2 × 0.0340)
= Exp(5.1215)
= $167.59
February 5, 2025 calculations
Top border of price channel:
Exp(Y1,246)
= Exp(a + b × X1,246 + 2 × s)
= Exp(a + b × 1,811 + 2 × s)
= Exp(4.6895 + 0.0004 × 1,811 + 2 × 0.0340)
= Exp(5.4786)
= $239.50
Bottom border of price channel:
Exp(Y1,246)
= Exp(a + b × X1,246 – 2 × s)
= Exp(a + b × 1,811 – 2 × s)
= Exp(4.6895 + 0.0004 × 1,811 – 2 × 0.0340)
= Exp(5.3425)
= $209.03
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 15.64% per annum.
- HON price at the close of February 20, 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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