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 11.73% per annum.
- KDP price at the close of July 28, 2022 was $38.50 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 14.23% per annum.
- KDP price at the close of July 28, 2022 was higher than the top border of the secondary price channel by $1.34 (3.59%). This indicates a possible reversal in the secondary trend direction.
- 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 KDP 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: July 10, 2018
End date: July 28, 2022
a = 3.0803
b = 0.0003
s = 0.0634
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 11.73%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0634) – 1
= 28.88%
July 10, 2018 calculations
Top border of price channel:
Exp(Y237)
= Exp(a + b × X237 + 2 × s)
= Exp(a + b × 344 + 2 × s)
= Exp(3.0803 + 0.0003 × 344 + 2 × 0.0634)
= Exp(3.3117)
= $27.43
Bottom border of price channel:
Exp(Y237)
= Exp(a + b × X237 – 2 × s)
= Exp(a + b × 344 – 2 × s)
= Exp(3.0803 + 0.0003 × 344 – 2 × 0.0634)
= Exp(3.0580)
= $21.28
July 28, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(3.0803 + 0.0003 × 1,823 + 2 × 0.0634)
= Exp(3.7611)
= $42.99
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(3.0803 + 0.0003 × 1,823 – 2 × 0.0634)
= Exp(3.5074)
= $33.36
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 11.73% per annum.
- KDP price at the close of July 28, 2022 was $38.50 and was inside the primary price channel.
Secondary Trend
Start date: January 11, 2022
End date: July 28, 2022
a = 4.3358
b = -0.0004
s = 0.0230
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0004) – 1
= -14.23%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0230) – 1
= 9.64%
January 11, 2022 calculations
Top border of price channel:
Exp(Y1,121)
= Exp(a + b × X1,121 + 2 × s)
= Exp(a + b × 1,625 + 2 × s)
= Exp(4.3358 + -0.0004 × 1,625 + 2 × 0.0230)
= Exp(3.6986)
= $40.39
Bottom border of price channel:
Exp(Y1,121)
= Exp(a + b × X1,121 – 2 × s)
= Exp(a + b × 1,625 – 2 × s)
= Exp(4.3358 + -0.0004 × 1,625 – 2 × 0.0230)
= Exp(3.6065)
= $36.84
July 28, 2022 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(4.3358 + -0.0004 × 1,823 + 2 × 0.0230)
= Exp(3.6154)
= $37.16
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(4.3358 + -0.0004 × 1,823 – 2 × 0.0230)
= Exp(3.5233)
= $33.90
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 14.23% per annum.
- KDP price at the close of July 28, 2022 was higher than the top border of the secondary price channel by $1.34 (3.59%). This indicates a possible reversal in the secondary trend direction.
Check current KDP price trends.
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