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 55.98% per annum.
- ETN price at the close of February 28, 2025 was $293.32 and was lower than the bottom border of the primary price channel by $61.55 (17.34%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.28% per annum.
- ETN price at the close of February 28, 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 ETN 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 18, 2022
End date: December 17, 2024
a = 3.7920
b = 0.0012
s = 0.0710
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 55.98%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0710) – 1
= 32.83%
May 18, 2022 calculations
Top border of price channel:
Exp(Y559)
= Exp(a + b × X559 + 2 × s)
= Exp(a + b × 807 + 2 × s)
= Exp(3.7920 + 0.0012 × 807 + 2 × 0.0710)
= Exp(4.9169)
= $136.58
Bottom border of price channel:
Exp(Y559)
= Exp(a + b × X559 – 2 × s)
= Exp(a + b × 807 – 2 × s)
= Exp(3.7920 + 0.0012 × 807 – 2 × 0.0710)
= Exp(4.6330)
= $102.82
December 17, 2024 calculations
Top border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 + 2 × s)
= Exp(a + b × 1,751 + 2 × s)
= Exp(3.7920 + 0.0012 × 1,751 + 2 × 0.0710)
= Exp(6.0667)
= $431.28
Bottom border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 – 2 × s)
= Exp(a + b × 1,751 – 2 × s)
= Exp(3.7920 + 0.0012 × 1,751 – 2 × 0.0710)
= Exp(5.7828)
= $324.68
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 55.98% per annum.
- ETN price at the close of February 28, 2025 was $293.32 and was lower than the bottom border of the primary price channel by $61.55 (17.34%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 7, 2024
End date: February 28, 2025
a = 9.3127
b = -0.0020
s = 0.0387
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0020) – 1
= -51.28%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0387) – 1
= 16.73%
November 7, 2024 calculations
Top border of price channel:
Exp(Y1,181)
= Exp(a + b × X1,181 + 2 × s)
= Exp(a + b × 1,711 + 2 × s)
= Exp(9.3127 + -0.0020 × 1,711 + 2 × 0.0387)
= Exp(6.0192)
= $411.26
Bottom border of price channel:
Exp(Y1,181)
= Exp(a + b × X1,181 – 2 × s)
= Exp(a + b × 1,711 – 2 × s)
= Exp(9.3127 + -0.0020 × 1,711 – 2 × 0.0387)
= Exp(5.8645)
= $352.32
February 28, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.3127 + -0.0020 × 1,824 + 2 × 0.0387)
= Exp(5.7966)
= $329.18
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.3127 + -0.0020 × 1,824 – 2 × 0.0387)
= Exp(5.6419)
= $282.00
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.28% per annum.
- ETN price at the close of February 28, 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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