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 75.99% per annum.
- NFLX price at the close of March 5, 2025 was $990.92 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 132.54% per annum.
- NFLX price at the close of March 5, 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 NFLX 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: April 21, 2022
End date: March 5, 2025
a = 4.0592
b = 0.0015
s = 0.0871
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 75.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0871) – 1
= 41.69%
April 21, 2022 calculations
Top border of price channel:
Exp(Y536)
= Exp(a + b × X536 + 2 × s)
= Exp(a + b × 776 + 2 × s)
= Exp(4.0592 + 0.0015 × 776 + 2 × 0.0871)
= Exp(5.4352)
= $229.33
Bottom border of price channel:
Exp(Y536)
= Exp(a + b × X536 – 2 × s)
= Exp(a + b × 776 – 2 × s)
= Exp(4.0592 + 0.0015 × 776 – 2 × 0.0871)
= Exp(5.0867)
= $161.86
March 5, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(4.0592 + 0.0015 × 1,825 + 2 × 0.0871)
= Exp(7.0597)
= $1,164.08
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(4.0592 + 0.0015 × 1,825 – 2 × 0.0871)
= Exp(6.7112)
= $821.59
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 75.99% per annum.
- NFLX price at the close of March 5, 2025 was $990.92 and was inside the primary price channel.
Secondary Trend
Start date: July 19, 2024
End date: March 5, 2025
a = 2.7316
b = 0.0023
s = 0.0440
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0023) – 1
= 132.54%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0440) – 1
= 19.25%
July 19, 2024 calculations
Top border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 + 2 × s)
= Exp(a + b × 1,596 + 2 × s)
= Exp(2.7316 + 0.0023 × 1,596 + 2 × 0.0440)
= Exp(6.5096)
= $671.56
Bottom border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 – 2 × s)
= Exp(a + b × 1,596 – 2 × s)
= Exp(2.7316 + 0.0023 × 1,596 – 2 × 0.0440)
= Exp(6.3336)
= $563.17
March 5, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(2.7316 + 0.0023 × 1,825 + 2 × 0.0440)
= Exp(7.0391)
= $1,140.31
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(2.7316 + 0.0023 × 1,825 – 2 × 0.0440)
= Exp(6.8630)
= $956.27
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 132.54% per annum.
- NFLX price at the close of March 5, 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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