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 75.29% per annum.
- NFLX price at the close of April 4, 2025 was $855.86 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 37.91% per annum.
- NFLX price at the close of April 4, 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 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 3, 2025
a = 4.1192
b = 0.0015
s = 0.0867
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0015) – 1
= 75.29%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0867) – 1
= 41.48%
April 21, 2022 calculations
Top border of price channel:
Exp(Y515)
= Exp(a + b × X515 + 2 × s)
= Exp(a + b × 745 + 2 × s)
= Exp(4.1192 + 0.0015 × 745 + 2 × 0.0867)
= Exp(5.4383)
= $230.05
Bottom border of price channel:
Exp(Y515)
= Exp(a + b × X515 – 2 × s)
= Exp(a + b × 745 – 2 × s)
= Exp(4.1192 + 0.0015 × 745 – 2 × 0.0867)
= Exp(5.0913)
= $162.60
April 3, 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(4.1192 + 0.0015 × 1,823 + 2 × 0.0867)
= Exp(7.0960)
= $1,207.11
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(4.1192 + 0.0015 × 1,823 – 2 × 0.0867)
= Exp(6.7490)
= $853.20
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 75.29% per annum.
- NFLX price at the close of April 4, 2025 was $855.86 and was inside the primary price channel.
Secondary Trend
Start date: January 23, 2025
End date: April 4, 2025
a = 9.2115
b = -0.0013
s = 0.0396
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0013) – 1
= -37.91%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0396) – 1
= 17.18%
January 23, 2025 calculations
Top border of price channel:
Exp(Y1,206)
= Exp(a + b × X1,206 + 2 × s)
= Exp(a + b × 1,753 + 2 × s)
= Exp(9.2115 + -0.0013 × 1,753 + 2 × 0.0396)
= Exp(7.0017)
= $1,098.54
Bottom border of price channel:
Exp(Y1,206)
= Exp(a + b × X1,206 – 2 × s)
= Exp(a + b × 1,753 – 2 × s)
= Exp(9.2115 + -0.0013 × 1,753 – 2 × 0.0396)
= Exp(6.8432)
= $937.45
April 4, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.2115 + -0.0013 × 1,824 + 2 × 0.0396)
= Exp(6.9090)
= $1,001.27
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.2115 + -0.0013 × 1,824 – 2 × 0.0396)
= Exp(6.7505)
= $854.45
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 37.91% per annum.
- NFLX price at the close of April 4, 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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