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 62.63% per annum.
- MU price at the close of March 27, 2025 was $91.16 and was lower than the bottom border of the primary price channel by $37.91 (29.37%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.01% per annum.
- MU 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 MU 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: August 22, 2022
End date: July 31, 2024
a = 2.6556
b = 0.0013
s = 0.1121
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 62.63%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1121) – 1
= 56.56%
August 22, 2022 calculations
Top border of price channel:
Exp(Y604)
= Exp(a + b × X604 + 2 × s)
= Exp(a + b × 875 + 2 × s)
= Exp(2.6556 + 0.0013 × 875 + 2 × 0.1121)
= Exp(4.0455)
= $57.14
Bottom border of price channel:
Exp(Y604)
= Exp(a + b × X604 – 2 × s)
= Exp(a + b × 875 – 2 × s)
= Exp(2.6556 + 0.0013 × 875 – 2 × 0.1121)
= Exp(3.5973)
= $36.50
July 31, 2024 calculations
Top border of price channel:
Exp(Y1,091)
= Exp(a + b × X1,091 + 2 × s)
= Exp(a + b × 1,584 + 2 × s)
= Exp(2.6556 + 0.0013 × 1,584 + 2 × 0.1121)
= Exp(4.9902)
= $146.96
Bottom border of price channel:
Exp(Y1,091)
= Exp(a + b × X1,091 – 2 × s)
= Exp(a + b × 1,584 – 2 × s)
= Exp(2.6556 + 0.0013 × 1,584 – 2 × 0.1121)
= Exp(4.5419)
= $93.87
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 62.63% per annum.
- MU price at the close of March 27, 2025 was $91.16 and was lower than the bottom border of the primary price channel by $37.91 (29.37%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 21, 2024
End date: March 27, 2025
a = 6.0789
b = -0.0009
s = 0.0991
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -27.01%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0991) – 1
= 48.62%
March 21, 2024 calculations
Top border of price channel:
Exp(Y1,001)
= Exp(a + b × X1,001 + 2 × s)
= Exp(a + b × 1,452 + 2 × s)
= Exp(6.0789 + -0.0009 × 1,452 + 2 × 0.0991)
= Exp(5.0245)
= $152.09
Bottom border of price channel:
Exp(Y1,001)
= Exp(a + b × X1,001 – 2 × s)
= Exp(a + b × 1,452 – 2 × s)
= Exp(6.0789 + -0.0009 × 1,452 – 2 × 0.0991)
= Exp(4.6283)
= $102.34
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(6.0789 + -0.0009 × 1,823 + 2 × 0.0991)
= Exp(4.7045)
= $110.44
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(6.0789 + -0.0009 × 1,823 – 2 × 0.0991)
= Exp(4.3083)
= $74.31
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.01% per annum.
- MU 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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