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 91.83% per annum.
- ANET price at the close of November 19, 2024 was $377.70 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 35.99% per annum.
- ANET price at the close of November 19, 2024 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 ANET 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 15, 2022
End date: November 14, 2024
a = 2.7752
b = 0.0018
s = 0.0678
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 91.83%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0678) – 1
= 31.14%
December 15, 2022 calculations
Top border of price channel:
Exp(Y773)
= Exp(a + b × X773 + 2 × s)
= Exp(a + b × 1,121 + 2 × s)
= Exp(2.7752 + 0.0018 × 1,121 + 2 × 0.0678)
= Exp(4.9114)
= $135.83
Bottom border of price channel:
Exp(Y773)
= Exp(a + b × X773 – 2 × s)
= Exp(a + b × 1,121 – 2 × s)
= Exp(2.7752 + 0.0018 × 1,121 – 2 × 0.0678)
= Exp(4.6403)
= $103.58
November 14, 2024 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(2.7752 + 0.0018 × 1,821 + 2 × 0.0678)
= Exp(6.1607)
= $473.77
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(2.7752 + 0.0018 × 1,821 – 2 × 0.0678)
= Exp(5.8896)
= $361.27
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 91.83% per annum.
- ANET price at the close of November 19, 2024 was $377.70 and was inside the primary price channel.
Secondary Trend
Start date: October 8, 2024
End date: November 19, 2024
a = 8.1936
b = -0.0012
s = 0.0287
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0012) – 1
= -35.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0287) – 1
= 12.18%
October 8, 2024 calculations
Top border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 + 2 × s)
= Exp(a + b × 1,784 + 2 × s)
= Exp(8.1936 + -0.0012 × 1,784 + 2 × 0.0287)
= Exp(6.0706)
= $432.96
Bottom border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 – 2 × s)
= Exp(a + b × 1,784 – 2 × s)
= Exp(8.1936 + -0.0012 × 1,784 – 2 × 0.0287)
= Exp(5.9557)
= $385.95
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(8.1936 + -0.0012 × 1,826 + 2 × 0.0287)
= Exp(6.0193)
= $411.30
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(8.1936 + -0.0012 × 1,826 – 2 × 0.0287)
= Exp(5.9044)
= $366.64
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 35.99% per annum.
- ANET price at the close of November 19, 2024 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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