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 2.14% per annum.
- MNST price at the close of May 7, 2024 was $54.67 and was higher than the top border of the primary price channel by $1.77 (3.34%).
- The secondary trend is increasing.
- The growth rate of the secondary trend is 26.85% per annum.
- MNST price at the close of May 7, 2024 was lower than the bottom border of the secondary price channel by $8.95 (14.07%). 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 MNST 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 30, 2020
End date: November 3, 2022
a = 3.7405
b = 0.0001
s = 0.0609
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 2.14%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0609) – 1
= 27.60%
July 30, 2020 calculations
Top border of price channel:
Exp(Y310)
= Exp(a + b × X310 + 2 × s)
= Exp(a + b × 449 + 2 × s)
= Exp(3.7405 + 0.0001 × 449 + 2 × 0.0609)
= Exp(3.8885)
= $48.84
Bottom border of price channel:
Exp(Y310)
= Exp(a + b × X310 – 2 × s)
= Exp(a + b × 449 – 2 × s)
= Exp(3.7405 + 0.0001 × 449 – 2 × 0.0609)
= Exp(3.6447)
= $38.27
November 3, 2022 calculations
Top border of price channel:
Exp(Y881)
= Exp(a + b × X881 + 2 × s)
= Exp(a + b × 1,275 + 2 × s)
= Exp(3.7405 + 0.0001 × 1,275 + 2 × 0.0609)
= Exp(3.9365)
= $51.24
Bottom border of price channel:
Exp(Y881)
= Exp(a + b × X881 – 2 × s)
= Exp(a + b × 1,275 – 2 × s)
= Exp(3.7405 + 0.0001 × 1,275 – 2 × 0.0609)
= Exp(3.6927)
= $40.15
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 2.14% per annum.
- MNST price at the close of May 7, 2024 was $54.67 and was higher than the top border of the primary price channel by $1.77 (3.34%).
Secondary Trend
Start date: January 14, 2022
End date: September 18, 2023
a = 3.0493
b = 0.0007
s = 0.0430
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 26.85%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0430) – 1
= 18.78%
January 14, 2022 calculations
Top border of price channel:
Exp(Y679)
= Exp(a + b × X679 + 2 × s)
= Exp(a + b × 982 + 2 × s)
= Exp(3.0493 + 0.0007 × 982 + 2 × 0.0430)
= Exp(3.7752)
= $43.61
Bottom border of price channel:
Exp(Y679)
= Exp(a + b × X679 – 2 × s)
= Exp(a + b × 982 – 2 × s)
= Exp(3.0493 + 0.0007 × 982 – 2 × 0.0430)
= Exp(3.6031)
= $36.71
September 18, 2023 calculations
Top border of price channel:
Exp(Y1,098)
= Exp(a + b × X1,098 + 2 × s)
= Exp(a + b × 1,594 + 2 × s)
= Exp(3.0493 + 0.0007 × 1,594 + 2 × 0.0430)
= Exp(4.1739)
= $64.97
Bottom border of price channel:
Exp(Y1,098)
= Exp(a + b × X1,098 – 2 × s)
= Exp(a + b × 1,594 – 2 × s)
= Exp(3.0493 + 0.0007 × 1,594 – 2 × 0.0430)
= Exp(4.0018)
= $54.70
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 26.85% per annum.
- MNST price at the close of May 7, 2024 was lower than the bottom border of the secondary price channel by $8.95 (14.07%). This indicates a possible reversal in the secondary trend direction.
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