Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 77.10% per annum.
- SMCI price at the close of March 28, 2025 was $34.26 and was higher than the top border of the primary price channel by $1.28 (3.89%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 221.69% per annum.
- SMCI price at the close of March 28, 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 SMCI 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 12, 2024
End date: February 7, 2025
a = 10.4728
b = -0.0040
s = 0.1949
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0040) – 1
= -77.10%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1949) – 1
= 118.09%
February 12, 2024 calculations
Top border of price channel:
Exp(Y974)
= Exp(a + b × X974 + 2 × s)
= Exp(a + b × 1,414 + 2 × s)
= Exp(10.4728 + -0.0040 × 1,414 + 2 × 0.1949)
= Exp(5.1518)
= $172.73
Bottom border of price channel:
Exp(Y974)
= Exp(a + b × X974 – 2 × s)
= Exp(a + b × 1,414 – 2 × s)
= Exp(10.4728 + -0.0040 × 1,414 – 2 × 0.1949)
= Exp(4.3720)
= $79.20
February 7, 2025 calculations
Top border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 + 2 × s)
= Exp(a + b × 1,775 + 2 × s)
= Exp(10.4728 + -0.0040 × 1,775 + 2 × 0.1949)
= Exp(3.6937)
= $40.19
Bottom border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 – 2 × s)
= Exp(a + b × 1,775 – 2 × s)
= Exp(10.4728 + -0.0040 × 1,775 – 2 × 0.1949)
= Exp(2.9140)
= $18.43
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 77.10% per annum.
- SMCI price at the close of March 28, 2025 was $34.26 and was higher than the top border of the primary price channel by $1.28 (3.89%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 30, 2024
End date: March 26, 2025
a = -2.0603
b = 0.0032
s = 0.1863
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0032) – 1
= 221.69%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1863) – 1
= 110.65%
October 30, 2024 calculations
Top border of price channel:
Exp(Y1,155)
= Exp(a + b × X1,155 + 2 × s)
= Exp(a + b × 1,675 + 2 × s)
= Exp(-2.0603 + 0.0032 × 1,675 + 2 × 0.1863)
= Exp(3.6742)
= $39.42
Bottom border of price channel:
Exp(Y1,155)
= Exp(a + b × X1,155 – 2 × s)
= Exp(a + b × 1,675 – 2 × s)
= Exp(-2.0603 + 0.0032 × 1,675 – 2 × 0.1863)
= Exp(2.9291)
= $18.71
March 26, 2025 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,822 + 2 × s)
= Exp(-2.0603 + 0.0032 × 1,822 + 2 × 0.1863)
= Exp(4.1447)
= $63.10
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,822 – 2 × s)
= Exp(-2.0603 + 0.0032 × 1,822 – 2 × 0.1863)
= Exp(3.3997)
= $29.96
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 221.69% per annum.
- SMCI price at the close of March 28, 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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