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 80.35% per annum.
- NFLX price at the close of April 26, 2024 was $561.23 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 153.02% per annum.
- NFLX price at the close of April 26, 2024 was lower than the bottom border of the secondary price channel by $29.54 (5.00%). 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 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: April 26, 2024
a = 3.4858
b = 0.0016
s = 0.0940
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 80.35%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0940) – 1
= 45.67%
April 21, 2022 calculations
Top border of price channel:
Exp(Y752)
= Exp(a + b × X752 + 2 × s)
= Exp(a + b × 1,088 + 2 × s)
= Exp(3.4858 + 0.0016 × 1,088 + 2 × 0.0940)
= Exp(5.4317)
= $228.54
Bottom border of price channel:
Exp(Y752)
= Exp(a + b × X752 – 2 × s)
= Exp(a + b × 1,088 – 2 × s)
= Exp(3.4858 + 0.0016 × 1,088 – 2 × 0.0940)
= Exp(5.0555)
= $156.88
April 26, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(3.4858 + 0.0016 × 1,824 + 2 × 0.0940)
= Exp(6.6208)
= $750.57
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.4858 + 0.0016 × 1,824 – 2 × 0.0940)
= Exp(6.2446)
= $515.24
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 80.35% per annum.
- NFLX price at the close of April 26, 2024 was $561.23 and was inside the primary price channel.
Secondary Trend
Start date: September 18, 2023
End date: April 26, 2024
a = 1.8530
b = 0.0025
s = 0.0552
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0025) – 1
= 153.02%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0552) – 1
= 24.71%
September 18, 2023 calculations
Top border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 + 2 × s)
= Exp(a + b × 1,603 + 2 × s)
= Exp(1.8530 + 0.0025 × 1,603 + 2 × 0.0552)
= Exp(6.0402)
= $419.97
Bottom border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 – 2 × s)
= Exp(a + b × 1,603 – 2 × s)
= Exp(1.8530 + 0.0025 × 1,603 – 2 × 0.0552)
= Exp(5.8194)
= $336.76
April 26, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(1.8530 + 0.0025 × 1,824 + 2 × 0.0552)
= Exp(6.6022)
= $736.74
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(1.8530 + 0.0025 × 1,824 – 2 × 0.0552)
= Exp(6.3814)
= $590.77
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 153.02% per annum.
- NFLX price at the close of April 26, 2024 was lower than the bottom border of the secondary price channel by $29.54 (5.00%). This indicates a possible reversal in the secondary trend direction.
- 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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