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 46.87% per annum.
- LIN price at the close of January 8, 2025 was $420.01 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 62.58% per annum.
- LIN price at the close of January 8, 2025 was higher than the top border of the secondary price channel by $0.92 (0.22%). This indicates a possible reversal in the secondary trend direction.
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 LIN 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: October 14, 2024
End date: January 8, 2025
a = 9.1931
b = -0.0017
s = 0.0156
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0017) – 1
= -46.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0156) – 1
= 6.46%
October 14, 2024 calculations
Top border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 + 2 × s)
= Exp(a + b × 1,740 + 2 × s)
= Exp(9.1931 + -0.0017 × 1,740 + 2 × 0.0156)
= Exp(6.2098)
= $497.59
Bottom border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 – 2 × s)
= Exp(a + b × 1,740 – 2 × s)
= Exp(9.1931 + -0.0017 × 1,740 – 2 × 0.0156)
= Exp(6.1472)
= $467.39
January 8, 2025 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(9.1931 + -0.0017 × 1,826 + 2 × 0.0156)
= Exp(6.0608)
= $428.71
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.1931 + -0.0017 × 1,826 – 2 × 0.0156)
= Exp(5.9982)
= $402.69
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 46.87% per annum.
- LIN price at the close of January 8, 2025 was $420.01 and was inside the primary price channel.
Secondary Trend
Start date: November 26, 2024
End date: January 8, 2025
a = 10.9299
b = -0.0027
s = 0.0125
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0027) – 1
= -62.58%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0125) – 1
= 5.13%
November 26, 2024 calculations
Top border of price channel:
Exp(Y1,229)
= Exp(a + b × X1,229 + 2 × s)
= Exp(a + b × 1,783 + 2 × s)
= Exp(10.9299 + -0.0027 × 1,783 + 2 × 0.0125)
= Exp(6.1539)
= $470.54
Bottom border of price channel:
Exp(Y1,229)
= Exp(a + b × X1,229 – 2 × s)
= Exp(a + b × 1,783 – 2 × s)
= Exp(10.9299 + -0.0027 × 1,783 – 2 × 0.0125)
= Exp(6.1038)
= $447.57
January 8, 2025 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(10.9299 + -0.0027 × 1,826 + 2 × 0.0125)
= Exp(6.0381)
= $419.09
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(10.9299 + -0.0027 × 1,826 – 2 × 0.0125)
= Exp(5.9880)
= $398.64
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 62.58% per annum.
- LIN price at the close of January 8, 2025 was higher than the top border of the secondary price channel by $0.92 (0.22%). This indicates a possible reversal in the secondary trend direction.
- 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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