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 10.22% per annum.
- MCHP price at the close of February 2, 2023 was $84.53 and was higher than the top border of the primary price channel by $9.38 (12.49%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 40.99% per annum.
- MCHP price at the close of February 2, 2023 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 MCHP 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: January 6, 2021
End date: November 9, 2022
a = 4.6967
b = -0.0003
s = 0.0807
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -10.22%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0807) – 1
= 38.09%
January 6, 2021 calculations
Top border of price channel:
Exp(Y735)
= Exp(a + b × X735 + 2 × s)
= Exp(a + b × 1,066 + 2 × s)
= Exp(4.6967 + -0.0003 × 1,066 + 2 × 0.0807)
= Exp(4.5431)
= $93.98
Bottom border of price channel:
Exp(Y735)
= Exp(a + b × X735 – 2 × s)
= Exp(a + b × 1,066 – 2 × s)
= Exp(4.6967 + -0.0003 × 1,066 – 2 × 0.0807)
= Exp(4.2204)
= $68.06
November 9, 2022 calculations
Top border of price channel:
Exp(Y1,200)
= Exp(a + b × X1,200 + 2 × s)
= Exp(a + b × 1,738 + 2 × s)
= Exp(4.6967 + -0.0003 × 1,738 + 2 × 0.0807)
= Exp(4.3445)
= $77.06
Bottom border of price channel:
Exp(Y1,200)
= Exp(a + b × X1,200 – 2 × s)
= Exp(a + b × 1,738 – 2 × s)
= Exp(4.6967 + -0.0003 × 1,738 – 2 × 0.0807)
= Exp(4.0218)
= $55.80
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 10.22% per annum.
- MCHP price at the close of February 2, 2023 was $84.53 and was higher than the top border of the primary price channel by $9.38 (12.49%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 10, 2022
End date: February 2, 2023
a = 2.6059
b = 0.0009
s = 0.0715
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 40.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0715) – 1
= 33.09%
June 10, 2022 calculations
Top border of price channel:
Exp(Y1,095)
= Exp(a + b × X1,095 + 2 × s)
= Exp(a + b × 1,586 + 2 × s)
= Exp(2.6059 + 0.0009 × 1,586 + 2 × 0.0715)
= Exp(4.2414)
= $69.51
Bottom border of price channel:
Exp(Y1,095)
= Exp(a + b × X1,095 – 2 × s)
= Exp(a + b × 1,586 – 2 × s)
= Exp(2.6059 + 0.0009 × 1,586 – 2 × 0.0715)
= Exp(3.9556)
= $52.23
February 2, 2023 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(2.6059 + 0.0009 × 1,823 + 2 × 0.0715)
= Exp(4.4645)
= $86.88
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(2.6059 + 0.0009 × 1,823 – 2 × 0.0715)
= Exp(4.1786)
= $65.27
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 40.99% per annum.
- MCHP price at the close of February 2, 2023 was inside the secondary price channel.
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