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 10.70% per annum.
- SNPS price at the close of February 20, 2025 was $493.97 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 55.56% per annum.
- SNPS price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $6.35 (1.27%). This indicates a possible reversal in the secondary trend direction.
- 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 SNPS 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: January 22, 2024
End date: February 20, 2025
a = 6.7979
b = -0.0003
s = 0.0555
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -10.70%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0555) – 1
= 24.88%
January 22, 2024 calculations
Top border of price channel:
Exp(Y985)
= Exp(a + b × X985 + 2 × s)
= Exp(a + b × 1,431 + 2 × s)
= Exp(6.7979 + -0.0003 × 1,431 + 2 × 0.0555)
= Exp(6.4655)
= $642.59
Bottom border of price channel:
Exp(Y985)
= Exp(a + b × X985 – 2 × s)
= Exp(a + b × 1,431 – 2 × s)
= Exp(6.7979 + -0.0003 × 1,431 – 2 × 0.0555)
= Exp(6.2433)
= $514.57
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(6.7979 + -0.0003 × 1,826 + 2 × 0.0555)
= Exp(6.3431)
= $568.55
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(6.7979 + -0.0003 × 1,826 – 2 × 0.0555)
= Exp(6.1209)
= $455.28
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 10.70% per annum.
- SNPS price at the close of February 20, 2025 was $493.97 and was inside the primary price channel.
Secondary Trend
Start date: December 18, 2024
End date: February 20, 2025
a = 4.0631
b = 0.0012
s = 0.0292
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 55.56%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0292) – 1
= 12.39%
December 18, 2024 calculations
Top border of price channel:
Exp(Y1,215)
= Exp(a + b × X1,215 + 2 × s)
= Exp(a + b × 1,762 + 2 × s)
= Exp(4.0631 + 0.0012 × 1,762 + 2 × 0.0292)
= Exp(6.2546)
= $520.38
Bottom border of price channel:
Exp(Y1,215)
= Exp(a + b × X1,215 – 2 × s)
= Exp(a + b × 1,762 – 2 × s)
= Exp(4.0631 + 0.0012 × 1,762 – 2 × 0.0292)
= Exp(6.1378)
= $463.02
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(4.0631 + 0.0012 × 1,826 + 2 × 0.0292)
= Exp(6.3320)
= $562.30
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.0631 + 0.0012 × 1,826 – 2 × 0.0292)
= Exp(6.2153)
= $500.32
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 55.56% per annum.
- SNPS price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $6.35 (1.27%). 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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