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 212.35% per annum.
- NVDA price at the close of March 27, 2025 was $111.43 and was lower than the bottom border of the primary price channel by $73.16 (39.63%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 37.16% per annum.
- NVDA 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 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 22, 2022
End date: December 6, 2024
a = -0.1913
b = 0.0031
s = 0.1395
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0031) – 1
= 212.35%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1395) – 1
= 74.74%
August 22, 2022 calculations
Top border of price channel:
Exp(Y604)
= Exp(a + b × X604 + 2 × s)
= Exp(a + b × 875 + 2 × s)
= Exp(-0.1913 + 0.0031 × 875 + 2 × 0.1395)
= Exp(2.8181)
= $16.75
Bottom border of price channel:
Exp(Y604)
= Exp(a + b × X604 – 2 × s)
= Exp(a + b × 875 – 2 × s)
= Exp(-0.1913 + 0.0031 × 875 – 2 × 0.1395)
= Exp(2.2600)
= $9.58
December 6, 2024 calculations
Top border of price channel:
Exp(Y1,181)
= Exp(a + b × X1,181 + 2 × s)
= Exp(a + b × 1,712 + 2 × s)
= Exp(-0.1913 + 0.0031 × 1,712 + 2 × 0.1395)
= Exp(5.4299)
= $228.13
Bottom border of price channel:
Exp(Y1,181)
= Exp(a + b × X1,181 – 2 × s)
= Exp(a + b × 1,712 – 2 × s)
= Exp(-0.1913 + 0.0031 × 1,712 – 2 × 0.1395)
= Exp(4.8718)
= $130.55
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 212.35% per annum.
- NVDA price at the close of March 27, 2025 was $111.43 and was lower than the bottom border of the primary price channel by $73.16 (39.63%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 16, 2024
End date: March 27, 2025
a = 7.1066
b = -0.0013
s = 0.0550
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0013) – 1
= -37.16%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0550) – 1
= 24.60%
October 16, 2024 calculations
Top border of price channel:
Exp(Y1,145)
= Exp(a + b × X1,145 + 2 × s)
= Exp(a + b × 1,661 + 2 × s)
= Exp(7.1066 + -0.0013 × 1,661 + 2 × 0.0550)
= Exp(5.1022)
= $164.38
Bottom border of price channel:
Exp(Y1,145)
= Exp(a + b × X1,145 – 2 × s)
= Exp(a + b × 1,661 – 2 × s)
= Exp(7.1066 + -0.0013 × 1,661 – 2 × 0.0550)
= Exp(4.8822)
= $131.92
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(7.1066 + -0.0013 × 1,823 + 2 × 0.0550)
= Exp(4.8959)
= $133.75
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(7.1066 + -0.0013 × 1,823 – 2 × 0.0550)
= Exp(4.6760)
= $107.34
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 37.16% per annum.
- NVDA 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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