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 18.12% per annum.
- CVS price at the close of January 17, 2025 was $52.62 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 5,019.54% per annum.
- CVS price at the close of January 17, 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 CVS 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 10, 2021
End date: January 17, 2025
a = 4.9802
b = -0.0005
s = 0.0833
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0005) – 1
= -18.12%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0833) – 1
= 39.53%
December 10, 2021 calculations
Top border of price channel:
Exp(Y478)
= Exp(a + b × X478 + 2 × s)
= Exp(a + b × 689 + 2 × s)
= Exp(4.9802 + -0.0005 × 689 + 2 × 0.0833)
= Exp(4.7694)
= $117.85
Bottom border of price channel:
Exp(Y478)
= Exp(a + b × X478 – 2 × s)
= Exp(a + b × 689 – 2 × s)
= Exp(4.9802 + -0.0005 × 689 – 2 × 0.0833)
= Exp(4.4363)
= $84.46
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(4.9802 + -0.0005 × 1,823 + 2 × 0.0833)
= Exp(4.1483)
= $63.32
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(4.9802 + -0.0005 × 1,823 – 2 × 0.0833)
= Exp(3.8152)
= $45.39
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 18.12% per annum.
- CVS price at the close of January 17, 2025 was $52.62 and was inside the primary price channel.
Secondary Trend
Start date: December 30, 2024
End date: January 17, 2025
a = -15.6953
b = 0.0108
s = 0.0210
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0108) – 1
= 5,019.54%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0210) – 1
= 8.76%
December 30, 2024 calculations
Top border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 + 2 × s)
= Exp(a + b × 1,805 + 2 × s)
= Exp(-15.6953 + 0.0108 × 1,805 + 2 × 0.0210)
= Exp(3.8093)
= $45.12
Bottom border of price channel:
Exp(Y1,244)
= Exp(a + b × X1,244 – 2 × s)
= Exp(a + b × 1,805 – 2 × s)
= Exp(-15.6953 + 0.0108 × 1,805 – 2 × 0.0210)
= Exp(3.7253)
= $41.48
January 17, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(-15.6953 + 0.0108 × 1,823 + 2 × 0.0210)
= Exp(4.0034)
= $54.78
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(-15.6953 + 0.0108 × 1,823 – 2 × 0.0210)
= Exp(3.9194)
= $50.37
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 5,019.54% per annum.
- CVS price at the close of January 17, 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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