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 68.26% per annum.
- WDC price at the close of February 12, 2024 was $57.32 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 214.00% per annum.
- WDC price at the close of February 12, 2024 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 WDC 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: March 10, 2023
End date: February 12, 2024
a = 1.3876
b = 0.0014
s = 0.0549
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0014) – 1
= 68.26%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0549) – 1
= 24.53%
March 10, 2023 calculations
Top border of price channel:
Exp(Y1,025)
= Exp(a + b × X1,025 + 2 × s)
= Exp(a + b × 1,486 + 2 × s)
= Exp(1.3876 + 0.0014 × 1,486 + 2 × 0.0549)
= Exp(3.6158)
= $37.18
Bottom border of price channel:
Exp(Y1,025)
= Exp(a + b × X1,025 – 2 × s)
= Exp(a + b × 1,486 – 2 × s)
= Exp(1.3876 + 0.0014 × 1,486 – 2 × 0.0549)
= Exp(3.3964)
= $29.86
February 12, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(1.3876 + 0.0014 × 1,825 + 2 × 0.0549)
= Exp(4.0991)
= $60.29
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(1.3876 + 0.0014 × 1,825 – 2 × 0.0549)
= Exp(3.8797)
= $48.41
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 68.26% per annum.
- WDC price at the close of February 12, 2024 was $57.32 and was inside the primary price channel.
Secondary Trend
Start date: October 20, 2023
End date: February 12, 2024
a = -1.6399
b = 0.0031
s = 0.0348
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0031) – 1
= 214.00%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0348) – 1
= 14.95%
October 20, 2023 calculations
Top border of price channel:
Exp(Y1,180)
= Exp(a + b × X1,180 + 2 × s)
= Exp(a + b × 1,710 + 2 × s)
= Exp(-1.6399 + 0.0031 × 1,710 + 2 × 0.0348)
= Exp(3.7904)
= $44.27
Bottom border of price channel:
Exp(Y1,180)
= Exp(a + b × X1,180 – 2 × s)
= Exp(a + b × 1,710 – 2 × s)
= Exp(-1.6399 + 0.0031 × 1,710 – 2 × 0.0348)
= Exp(3.6511)
= $38.52
February 12, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(-1.6399 + 0.0031 × 1,825 + 2 × 0.0348)
= Exp(4.1509)
= $63.49
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(-1.6399 + 0.0031 × 1,825 – 2 × 0.0348)
= Exp(4.0116)
= $55.23
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 214.00% per annum.
- WDC price at the close of February 12, 2024 was inside the secondary price channel.
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