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 42.81% per annum.
- CMG price at the close of February 20, 2025 was $53.05 and was lower than the bottom border of the primary price channel by $4.89 (8.44%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 3.06% per annum.
- CMG price at the close of February 20, 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 CMG 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: May 5, 2022
End date: December 27, 2024
a = 2.4634
b = 0.0010
s = 0.0933
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0010) – 1
= 42.81%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0933) – 1
= 45.23%
May 5, 2022 calculations
Top border of price channel:
Exp(Y556)
= Exp(a + b × X556 + 2 × s)
= Exp(a + b × 804 + 2 × s)
= Exp(2.4634 + 0.0010 × 804 + 2 × 0.0933)
= Exp(3.4349)
= $31.03
Bottom border of price channel:
Exp(Y556)
= Exp(a + b × X556 – 2 × s)
= Exp(a + b × 804 – 2 × s)
= Exp(2.4634 + 0.0010 × 804 – 2 × 0.0933)
= Exp(3.0617)
= $21.36
December 27, 2024 calculations
Top border of price channel:
Exp(Y1,221)
= Exp(a + b × X1,221 + 2 × s)
= Exp(a + b × 1,771 + 2 × s)
= Exp(2.4634 + 0.0010 × 1,771 + 2 × 0.0933)
= Exp(4.3789)
= $79.75
Bottom border of price channel:
Exp(Y1,221)
= Exp(a + b × X1,221 – 2 × s)
= Exp(a + b × 1,771 – 2 × s)
= Exp(2.4634 + 0.0010 × 1,771 – 2 × 0.0933)
= Exp(4.0057)
= $54.91
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 42.81% per annum.
- CMG price at the close of February 20, 2025 was $53.05 and was lower than the bottom border of the primary price channel by $4.89 (8.44%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 18, 2024
End date: February 20, 2025
a = 4.2148
b = -0.0001
s = 0.0624
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.06%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0624) – 1
= 28.36%
March 18, 2024 calculations
Top border of price channel:
Exp(Y1,024)
= Exp(a + b × X1,024 + 2 × s)
= Exp(a + b × 1,487 + 2 × s)
= Exp(4.2148 + -0.0001 × 1,487 + 2 × 0.0624)
= Exp(4.2131)
= $67.56
Bottom border of price channel:
Exp(Y1,024)
= Exp(a + b × X1,024 – 2 × s)
= Exp(a + b × 1,487 – 2 × s)
= Exp(4.2148 + -0.0001 × 1,487 – 2 × 0.0624)
= Exp(3.9634)
= $52.63
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(4.2148 + -0.0001 × 1,826 + 2 × 0.0624)
= Exp(4.1842)
= $65.64
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.2148 + -0.0001 × 1,826 – 2 × 0.0624)
= Exp(3.9345)
= $51.14
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 3.06% per annum.
- CMG price at the close of February 20, 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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