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 1.58% per annum.
- TXN price at the close of March 24, 2025 was $185.51 and was higher than the top border of the primary price channel by $11.75 (6.76%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 9.72% per annum.
- TXN price at the close of March 24, 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 TXN 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 7, 2021
End date: April 23, 2024
a = 5.1226
b = 0.0000
s = 0.0574
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -1.58%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0574) – 1
= 25.81%
January 7, 2021 calculations
Top border of price channel:
Exp(Y199)
= Exp(a + b × X199 + 2 × s)
= Exp(a + b × 288 + 2 × s)
= Exp(5.1226 + 0.0000 × 288 + 2 × 0.0574)
= Exp(5.2248)
= $185.83
Bottom border of price channel:
Exp(Y199)
= Exp(a + b × X199 – 2 × s)
= Exp(a + b × 288 – 2 × s)
= Exp(5.1226 + 0.0000 × 288 – 2 × 0.0574)
= Exp(4.9952)
= $147.70
April 23, 2024 calculations
Top border of price channel:
Exp(Y1,026)
= Exp(a + b × X1,026 + 2 × s)
= Exp(a + b × 1,490 + 2 × s)
= Exp(5.1226 + 0.0000 × 1,490 + 2 × 0.0574)
= Exp(5.1723)
= $176.32
Bottom border of price channel:
Exp(Y1,026)
= Exp(a + b × X1,026 – 2 × s)
= Exp(a + b × 1,490 – 2 × s)
= Exp(5.1226 + 0.0000 × 1,490 – 2 × 0.0574)
= Exp(4.9427)
= $140.14
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.58% per annum.
- TXN price at the close of March 24, 2025 was $185.51 and was higher than the top border of the primary price channel by $11.75 (6.76%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 26, 2022
End date: March 24, 2025
a = 4.7980
b = 0.0003
s = 0.0726
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 9.72%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0726) – 1
= 33.69%
April 26, 2022 calculations
Top border of price channel:
Exp(Y526)
= Exp(a + b × X526 + 2 × s)
= Exp(a + b × 762 + 2 × s)
= Exp(4.7980 + 0.0003 × 762 + 2 × 0.0726)
= Exp(5.1370)
= $170.20
Bottom border of price channel:
Exp(Y526)
= Exp(a + b × X526 – 2 × s)
= Exp(a + b × 762 – 2 × s)
= Exp(4.7980 + 0.0003 × 762 – 2 × 0.0726)
= Exp(4.8466)
= $127.31
March 24, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(4.7980 + 0.0003 × 1,825 + 2 × 0.0726)
= Exp(5.4072)
= $223.01
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(4.7980 + 0.0003 × 1,825 – 2 × 0.0726)
= Exp(5.1168)
= $166.81
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 9.72% per annum.
- TXN price at the close of March 24, 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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