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 89.92% per annum.
- FDX price at the close of February 20, 2025 was $268.46 and was lower than the bottom border of the primary price channel by $366.96 (57.75%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 13.53% per annum.
- FDX price at the close of February 20, 2025 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 FDX 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: September 16, 2022
End date: September 1, 2023
a = 3.3277
b = 0.0018
s = 0.0411
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 89.92%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0411) – 1
= 17.89%
September 16, 2022 calculations
Top border of price channel:
Exp(Y648)
= Exp(a + b × X648 + 2 × s)
= Exp(a + b × 938 + 2 × s)
= Exp(3.3277 + 0.0018 × 938 + 2 × 0.0411)
= Exp(5.0584)
= $157.33
Bottom border of price channel:
Exp(Y648)
= Exp(a + b × X648 – 2 × s)
= Exp(a + b × 938 – 2 × s)
= Exp(3.3277 + 0.0018 × 938 – 2 × 0.0411)
= Exp(4.8938)
= $133.46
September 1, 2023 calculations
Top border of price channel:
Exp(Y889)
= Exp(a + b × X889 + 2 × s)
= Exp(a + b × 1,288 + 2 × s)
= Exp(3.3277 + 0.0018 × 1,288 + 2 × 0.0411)
= Exp(5.6734)
= $291.03
Bottom border of price channel:
Exp(Y889)
= Exp(a + b × X889 – 2 × s)
= Exp(a + b × 1,288 – 2 × s)
= Exp(3.3277 + 0.0018 × 1,288 – 2 × 0.0411)
= Exp(5.5089)
= $246.87
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 89.92% per annum.
- FDX price at the close of February 20, 2025 was $268.46 and was lower than the bottom border of the primary price channel by $366.96 (57.75%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: March 17, 2023
End date: February 20, 2025
a = 5.0291
b = 0.0003
s = 0.0579
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 13.53%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0579) – 1
= 26.04%
March 17, 2023 calculations
Top border of price channel:
Exp(Y773)
= Exp(a + b × X773 + 2 × s)
= Exp(a + b × 1,120 + 2 × s)
= Exp(5.0291 + 0.0003 × 1,120 + 2 × 0.0579)
= Exp(5.5344)
= $253.24
Bottom border of price channel:
Exp(Y773)
= Exp(a + b × X773 – 2 × s)
= Exp(a + b × 1,120 – 2 × s)
= Exp(5.0291 + 0.0003 × 1,120 – 2 × 0.0579)
= Exp(5.3029)
= $200.92
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(5.0291 + 0.0003 × 1,826 + 2 × 0.0579)
= Exp(5.7799)
= $323.72
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.0291 + 0.0003 × 1,826 – 2 × 0.0579)
= Exp(5.5484)
= $256.83
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 13.53% per annum.
- FDX 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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