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 March 27, 2025 was $214.17 and was higher than the top border of the primary price channel by $6.42 (3.09%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 6.64% per annum.
- HON price at the close of March 27, 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 = 5.2881
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(Y156)
= Exp(a + b × X156 + 2 × s)
= Exp(a + b × 224 + 2 × s)
= Exp(5.2881 + 0.0000 × 224 + 2 × 0.0626)
= Exp(5.4039)
= $222.26
Bottom border of price channel:
Exp(Y156)
= Exp(a + b × X156 – 2 × s)
= Exp(a + b × 224 – 2 × s)
= Exp(5.2881 + 0.0000 × 224 – 2 × 0.0626)
= Exp(5.1535)
= $173.03
May 9, 2024 calculations
Top border of price channel:
Exp(Y1,035)
= Exp(a + b × X1,035 + 2 × s)
= Exp(a + b × 1,501 + 2 × s)
= Exp(5.2881 + 0.0000 × 1,501 + 2 × 0.0626)
= Exp(5.3499)
= $210.60
Bottom border of price channel:
Exp(Y1,035)
= Exp(a + b × X1,035 – 2 × s)
= Exp(a + b × 1,501 – 2 × s)
= Exp(5.2881 + 0.0000 × 1,501 – 2 × 0.0626)
= Exp(5.0996)
= $163.95
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.53% per annum.
- HON price at the close of March 27, 2025 was $214.17 and was higher than the top border of the primary price channel by $6.42 (3.09%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: February 3, 2022
End date: March 27, 2025
a = 5.0412
b = 0.0002
s = 0.0525
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 6.64%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0525) – 1
= 23.37%
February 3, 2022 calculations
Top border of price channel:
Exp(Y467)
= Exp(a + b × X467 + 2 × s)
= Exp(a + b × 675 + 2 × s)
= Exp(5.0412 + 0.0002 × 675 + 2 × 0.0525)
= Exp(5.2650)
= $193.44
Bottom border of price channel:
Exp(Y467)
= Exp(a + b × X467 – 2 × s)
= Exp(a + b × 675 – 2 × s)
= Exp(5.0412 + 0.0002 × 675 – 2 × 0.0525)
= Exp(5.0550)
= $156.80
March 27, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(5.0412 + 0.0002 × 1,823 + 2 × 0.0525)
= Exp(5.4671)
= $236.77
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(5.0412 + 0.0002 × 1,823 – 2 × 0.0525)
= Exp(5.2571)
= $191.92
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 6.64% per annum.
- HON price at the close of March 27, 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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