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 105.73% per annum.
- STLD price at the close of October 26, 2022 was $98.04 and was lower than the bottom border of the primary price channel by $20.56 (17.34%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 26.56% per annum.
- STLD price at the close of October 26, 2022 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 STLD 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: February 13, 2020
End date: November 24, 2021
a = 1.3777
b = 0.0020
s = 0.1045
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0020) – 1
= 105.73%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1045) – 1
= 51.89%
February 13, 2020 calculations
Top border of price channel:
Exp(Y576)
= Exp(a + b × X576 + 2 × s)
= Exp(a + b × 839 + 2 × s)
= Exp(1.3777 + 0.0020 × 839 + 2 × 0.1045)
= Exp(3.2450)
= $25.66
Bottom border of price channel:
Exp(Y576)
= Exp(a + b × X576 – 2 × s)
= Exp(a + b × 839 – 2 × s)
= Exp(1.3777 + 0.0020 × 839 – 2 × 0.1045)
= Exp(2.8270)
= $16.89
November 24, 2021 calculations
Top border of price channel:
Exp(Y1,026)
= Exp(a + b × X1,026 + 2 × s)
= Exp(a + b × 1,489 + 2 × s)
= Exp(1.3777 + 0.0020 × 1,489 + 2 × 0.1045)
= Exp(4.5297)
= $92.73
Bottom border of price channel:
Exp(Y1,026)
= Exp(a + b × X1,026 – 2 × s)
= Exp(a + b × 1,489 – 2 × s)
= Exp(1.3777 + 0.0020 × 1,489 – 2 × 0.1045)
= Exp(4.1117)
= $61.05
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 105.73% per annum.
- STLD price at the close of October 26, 2022 was $98.04 and was lower than the bottom border of the primary price channel by $20.56 (17.34%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 26, 2021
End date: October 21, 2022
a = 3.2236
b = 0.0006
s = 0.0993
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0006) – 1
= 26.56%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0993) – 1
= 48.78%
March 26, 2021 calculations
Top border of price channel:
Exp(Y857)
= Exp(a + b × X857 + 2 × s)
= Exp(a + b × 1,246 + 2 × s)
= Exp(3.2236 + 0.0006 × 1,246 + 2 × 0.0993)
= Exp(4.2262)
= $68.46
Bottom border of price channel:
Exp(Y857)
= Exp(a + b × X857 – 2 × s)
= Exp(a + b × 1,246 – 2 × s)
= Exp(3.2236 + 0.0006 × 1,246 – 2 × 0.0993)
= Exp(3.8289)
= $46.01
October 21, 2022 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,820 + 2 × s)
= Exp(3.2236 + 0.0006 × 1,820 + 2 × 0.0993)
= Exp(4.5966)
= $99.14
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,820 – 2 × s)
= Exp(3.2236 + 0.0006 × 1,820 – 2 × 0.0993)
= Exp(4.1992)
= $66.64
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 26.56% per annum.
- STLD price at the close of October 26, 2022 was inside the secondary price channel.
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