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 6.81% per annum.
- TSLA price at the close of November 19, 2024 was $346.00 and was higher than the top border of the primary price channel by $38.94 (12.68%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 117.40% per annum.
- TSLA price at the close of November 19, 2024 was higher than the top border of the secondary price channel by $13.44 (4.04%).
- 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 TSLA 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: December 7, 2020
End date: November 5, 2024
a = 5.6553
b = -0.0002
s = 0.2122
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -6.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.2122) – 1
= 133.73%
December 7, 2020 calculations
Top border of price channel:
Exp(Y263)
= Exp(a + b × X263 + 2 × s)
= Exp(a + b × 383 + 2 × s)
= Exp(5.6553 + -0.0002 × 383 + 2 × 0.2122)
= Exp(6.0058)
= $405.79
Bottom border of price channel:
Exp(Y263)
= Exp(a + b × X263 – 2 × s)
= Exp(a + b × 383 – 2 × s)
= Exp(5.6553 + -0.0002 × 383 – 2 × 0.2122)
= Exp(5.1569)
= $173.62
November 5, 2024 calculations
Top border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 + 2 × s)
= Exp(a + b × 1,812 + 2 × s)
= Exp(5.6553 + -0.0002 × 1,812 + 2 × 0.2122)
= Exp(5.7297)
= $307.89
Bottom border of price channel:
Exp(Y1,247)
= Exp(a + b × X1,247 – 2 × s)
= Exp(a + b × 1,812 – 2 × s)
= Exp(5.6553 + -0.0002 × 1,812 – 2 × 0.2122)
= Exp(4.8808)
= $131.73
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 6.81% per annum.
- TSLA price at the close of November 19, 2024 was $346.00 and was higher than the top border of the primary price channel by $38.94 (12.68%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 6, 2024
End date: November 19, 2024
a = 1.7231
b = 0.0021
s = 0.0994
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0021) – 1
= 117.40%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0994) – 1
= 48.81%
March 6, 2024 calculations
Top border of price channel:
Exp(Y1,078)
= Exp(a + b × X1,078 + 2 × s)
= Exp(a + b × 1,568 + 2 × s)
= Exp(1.7231 + 0.0021 × 1,568 + 2 × 0.0994)
= Exp(5.2579)
= $192.08
Bottom border of price channel:
Exp(Y1,078)
= Exp(a + b × X1,078 – 2 × s)
= Exp(a + b × 1,568 – 2 × s)
= Exp(1.7231 + 0.0021 × 1,568 – 2 × 0.0994)
= Exp(4.8604)
= $129.08
November 19, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(1.7231 + 0.0021 × 1,826 + 2 × 0.0994)
= Exp(5.8068)
= $332.56
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(1.7231 + 0.0021 × 1,826 – 2 × 0.0994)
= Exp(5.4094)
= $223.49
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 117.40% per annum.
- TSLA price at the close of November 19, 2024 was higher than the top border of the secondary price channel by $13.44 (4.04%).
- 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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