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 216.81% per annum.
- NVDA price at the close of February 20, 2025 was $140.11 and was lower than the bottom border of the primary price channel by $29.92 (17.60%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 28.49% per annum.
- NVDA price at the close of February 20, 2025 was inside the secondary price channel.
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 NVDA 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 26, 2022
End date: November 22, 2024
a = -0.3605
b = 0.0032
s = 0.1362
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0032) – 1
= 216.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1362) – 1
= 72.42%
August 26, 2022 calculations
Top border of price channel:
Exp(Y634)
= Exp(a + b × X634 + 2 × s)
= Exp(a + b × 917 + 2 × s)
= Exp(-0.3605 + 0.0032 × 917 + 2 × 0.1362)
= Exp(2.8089)
= $16.59
Bottom border of price channel:
Exp(Y634)
= Exp(a + b × X634 – 2 × s)
= Exp(a + b × 917 – 2 × s)
= Exp(-0.3605 + 0.0032 × 917 – 2 × 0.1362)
= Exp(2.2642)
= $9.62
November 22, 2024 calculations
Top border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 + 2 × s)
= Exp(a + b × 1,736 + 2 × s)
= Exp(-0.3605 + 0.0032 × 1,736 + 2 × 0.1362)
= Exp(5.3964)
= $220.61
Bottom border of price channel:
Exp(Y1,198)
= Exp(a + b × X1,198 – 2 × s)
= Exp(a + b × 1,736 – 2 × s)
= Exp(-0.3605 + 0.0032 × 1,736 – 2 × 0.1362)
= Exp(4.8516)
= $127.95
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 216.81% per annum.
- NVDA price at the close of February 20, 2025 was $140.11 and was lower than the bottom border of the primary price channel by $29.92 (17.60%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: May 24, 2024
End date: February 20, 2025
a = 3.6892
b = 0.0007
s = 0.0784
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0007) – 1
= 28.49%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0784) – 1
= 36.83%
May 24, 2024 calculations
Top border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 + 2 × s)
= Exp(a + b × 1,554 + 2 × s)
= Exp(3.6892 + 0.0007 × 1,554 + 2 × 0.0784)
= Exp(4.9131)
= $136.06
Bottom border of price channel:
Exp(Y1,072)
= Exp(a + b × X1,072 – 2 × s)
= Exp(a + b × 1,554 – 2 × s)
= Exp(3.6892 + 0.0007 × 1,554 – 2 × 0.0784)
= Exp(4.5996)
= $99.44
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(3.6892 + 0.0007 × 1,826 + 2 × 0.0784)
= Exp(5.0999)
= $164.01
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.6892 + 0.0007 × 1,826 – 2 × 0.0784)
= Exp(4.7864)
= $119.87
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 28.49% per annum.
- NVDA price at the close of February 20, 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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