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 217.19% per annum.
- NVDA price at the close of January 17, 2025 was $137.71 and was lower than the bottom border of the primary price channel by $15.25 (9.97%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 39.55% per annum.
- NVDA price at the close of January 17, 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 29, 2022
End date: November 22, 2024
a = -0.4633
b = 0.0032
s = 0.1359
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0032) – 1
= 217.19%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1359) – 1
= 72.21%
August 29, 2022 calculations
Top border of price channel:
Exp(Y657)
= Exp(a + b × X657 + 2 × s)
= Exp(a + b × 951 + 2 × s)
= Exp(-0.4633 + 0.0032 × 951 + 2 × 0.1359)
= Exp(2.8160)
= $16.71
Bottom border of price channel:
Exp(Y657)
= Exp(a + b × X657 – 2 × s)
= Exp(a + b × 951 – 2 × s)
= Exp(-0.4633 + 0.0032 × 951 – 2 × 0.1359)
= Exp(2.2725)
= $9.70
November 22, 2024 calculations
Top border of price channel:
Exp(Y1,220)
= Exp(a + b × X1,220 + 2 × s)
= Exp(a + b × 1,767 + 2 × s)
= Exp(-0.4633 + 0.0032 × 1,767 + 2 × 0.1359)
= Exp(5.3967)
= $220.67
Bottom border of price channel:
Exp(Y1,220)
= Exp(a + b × X1,220 – 2 × s)
= Exp(a + b × 1,767 – 2 × s)
= Exp(-0.4633 + 0.0032 × 1,767 – 2 × 0.1359)
= Exp(4.8531)
= $128.14
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 217.19% per annum.
- NVDA price at the close of January 17, 2025 was $137.71 and was lower than the bottom border of the primary price channel by $15.25 (9.97%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: May 23, 2024
End date: January 17, 2025
a = 3.2888
b = 0.0009
s = 0.0756
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 39.55%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0756) – 1
= 35.30%
May 23, 2024 calculations
Top border of price channel:
Exp(Y1,093)
= Exp(a + b × X1,093 + 2 × s)
= Exp(a + b × 1,584 + 2 × s)
= Exp(3.2888 + 0.0009 × 1,584 + 2 × 0.0756)
= Exp(4.8861)
= $132.44
Bottom border of price channel:
Exp(Y1,093)
= Exp(a + b × X1,093 – 2 × s)
= Exp(a + b × 1,584 – 2 × s)
= Exp(3.2888 + 0.0009 × 1,584 – 2 × 0.0756)
= Exp(4.5838)
= $97.89
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(3.2888 + 0.0009 × 1,823 + 2 × 0.0756)
= Exp(5.1043)
= $164.73
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(3.2888 + 0.0009 × 1,823 – 2 × 0.0756)
= Exp(4.8020)
= $121.76
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 39.55% per annum.
- NVDA price at the close of January 17, 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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