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 45.26% per annum.
- INTU price at the close of November 19, 2024 was $644.17 and was lower than the bottom border of the primary price channel by $76.24 (10.58%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 0.25% per annum.
- INTU 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 INTU 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: September 21, 2022
End date: May 23, 2024
a = 4.8194
b = 0.0010
s = 0.0536
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0010) – 1
= 45.26%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0536) – 1
= 23.92%
September 21, 2022 calculations
Top border of price channel:
Exp(Y713)
= Exp(a + b × X713 + 2 × s)
= Exp(a + b × 1,036 + 2 × s)
= Exp(4.8194 + 0.0010 × 1,036 + 2 × 0.0536)
= Exp(5.9862)
= $397.91
Bottom border of price channel:
Exp(Y713)
= Exp(a + b × X713 – 2 × s)
= Exp(a + b × 1,036 – 2 × s)
= Exp(4.8194 + 0.0010 × 1,036 – 2 × 0.0536)
= Exp(5.7718)
= $321.11
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(4.8194 + 0.0010 × 1,646 + 2 × 0.0536)
= Exp(6.6101)
= $742.59
Bottom border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 – 2 × s)
= Exp(a + b × 1,646 – 2 × s)
= Exp(4.8194 + 0.0010 × 1,646 – 2 × 0.0536)
= Exp(6.3957)
= $599.27
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 45.26% per annum.
- INTU price at the close of November 19, 2024 was $644.17 and was lower than the bottom border of the primary price channel by $76.24 (10.58%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: December 12, 2023
End date: November 6, 2024
a = 6.4522
b = 0.0000
s = 0.0366
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -0.25%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0366) – 1
= 15.78%
December 12, 2023 calculations
Top border of price channel:
Exp(Y1,021)
= Exp(a + b × X1,021 + 2 × s)
= Exp(a + b × 1,483 + 2 × s)
= Exp(6.4522 + 0.0000 × 1,483 + 2 × 0.0366)
= Exp(6.5153)
= $675.38
Bottom border of price channel:
Exp(Y1,021)
= Exp(a + b × X1,021 – 2 × s)
= Exp(a + b × 1,483 – 2 × s)
= Exp(6.4522 + 0.0000 × 1,483 – 2 × 0.0366)
= Exp(6.3687)
= $583.32
November 6, 2024 calculations
Top border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 + 2 × s)
= Exp(a + b × 1,813 + 2 × s)
= Exp(6.4522 + 0.0000 × 1,813 + 2 × 0.0366)
= Exp(6.5130)
= $673.85
Bottom border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 – 2 × s)
= Exp(a + b × 1,813 – 2 × s)
= Exp(6.4522 + 0.0000 × 1,813 – 2 × 0.0366)
= Exp(6.3665)
= $581.99
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 0.25% per annum.
- INTU 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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