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 95.26% per annum.
- GE price at the close of February 20, 2025 was $208.74 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 20.71% per annum.
- GE price at the close of February 20, 2025 was higher than the top border of the secondary price channel by $5.92 (2.92%).
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 GE 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: June 9, 2022
End date: November 29, 2024
a = 2.1286
b = 0.0018
s = 0.0870
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 95.26%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0870) – 1
= 41.64%
June 9, 2022 calculations
Top border of price channel:
Exp(Y580)
= Exp(a + b × X580 + 2 × s)
= Exp(a + b × 839 + 2 × s)
= Exp(2.1286 + 0.0018 × 839 + 2 × 0.0870)
= Exp(3.8408)
= $46.56
Bottom border of price channel:
Exp(Y580)
= Exp(a + b × X580 – 2 × s)
= Exp(a + b × 839 – 2 × s)
= Exp(2.1286 + 0.0018 × 839 – 2 × 0.0870)
= Exp(3.4927)
= $32.87
November 29, 2024 calculations
Top border of price channel:
Exp(Y1,202)
= Exp(a + b × X1,202 + 2 × s)
= Exp(a + b × 1,743 + 2 × s)
= Exp(2.1286 + 0.0018 × 1,743 + 2 × 0.0870)
= Exp(5.4981)
= $244.23
Bottom border of price channel:
Exp(Y1,202)
= Exp(a + b × X1,202 – 2 × s)
= Exp(a + b × 1,743 – 2 × s)
= Exp(2.1286 + 0.0018 × 1,743 – 2 × 0.0870)
= Exp(5.1500)
= $172.43
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 95.26% per annum.
- GE price at the close of February 20, 2025 was $208.74 and was inside the primary price channel.
Secondary Trend
Start date: April 3, 2024
End date: January 22, 2025
a = 4.2810
b = 0.0005
s = 0.0448
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 20.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0448) – 1
= 19.63%
April 3, 2024 calculations
Top border of price channel:
Exp(Y1,035)
= Exp(a + b × X1,035 + 2 × s)
= Exp(a + b × 1,503 + 2 × s)
= Exp(4.2810 + 0.0005 × 1,503 + 2 × 0.0448)
= Exp(5.1458)
= $171.70
Bottom border of price channel:
Exp(Y1,035)
= Exp(a + b × X1,035 – 2 × s)
= Exp(a + b × 1,503 – 2 × s)
= Exp(4.2810 + 0.0005 × 1,503 – 2 × 0.0448)
= Exp(4.9665)
= $143.53
January 22, 2025 calculations
Top border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 + 2 × s)
= Exp(a + b × 1,797 + 2 × s)
= Exp(4.2810 + 0.0005 × 1,797 + 2 × 0.0448)
= Exp(5.2974)
= $199.81
Bottom border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 – 2 × s)
= Exp(a + b × 1,797 – 2 × s)
= Exp(4.2810 + 0.0005 × 1,797 – 2 × 0.0448)
= Exp(5.1182)
= $167.03
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 20.71% per annum.
- GE price at the close of February 20, 2025 was higher than the top border of the secondary price channel by $5.92 (2.92%).
- 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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