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 96.36% per annum.
- GE price at the close of November 19, 2024 was $177.56 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 33.01% per annum.
- GE price at the close of November 19, 2024 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 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 10, 2022
End date: November 14, 2024
a = 1.9403
b = 0.0018
s = 0.0861
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0018) – 1
= 96.36%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0861) – 1
= 41.09%
June 10, 2022 calculations
Top border of price channel:
Exp(Y643)
= Exp(a + b × X643 + 2 × s)
= Exp(a + b × 933 + 2 × s)
= Exp(1.9403 + 0.0018 × 933 + 2 × 0.0861)
= Exp(3.8372)
= $46.40
Bottom border of price channel:
Exp(Y643)
= Exp(a + b × X643 – 2 × s)
= Exp(a + b × 933 – 2 × s)
= Exp(1.9403 + 0.0018 × 933 – 2 × 0.0861)
= Exp(3.4930)
= $32.88
November 14, 2024 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(1.9403 + 0.0018 × 1,821 + 2 × 0.0861)
= Exp(5.4788)
= $239.57
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(1.9403 + 0.0018 × 1,821 – 2 × 0.0861)
= Exp(5.1346)
= $169.80
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 96.36% per annum.
- GE price at the close of November 19, 2024 was $177.56 and was inside the primary price channel.
Secondary Trend
Start date: April 5, 2024
End date: November 19, 2024
a = 3.7888
b = 0.0008
s = 0.0370
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 33.01%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0370) – 1
= 15.95%
April 5, 2024 calculations
Top border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 + 2 × s)
= Exp(a + b × 1,598 + 2 × s)
= Exp(3.7888 + 0.0008 × 1,598 + 2 × 0.0370)
= Exp(5.1118)
= $165.96
Bottom border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 – 2 × s)
= Exp(a + b × 1,598 – 2 × s)
= Exp(3.7888 + 0.0008 × 1,598 – 2 × 0.0370)
= Exp(4.9638)
= $143.13
November 19, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(3.7888 + 0.0008 × 1,826 + 2 × 0.0370)
= Exp(5.2900)
= $198.34
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.7888 + 0.0008 × 1,826 – 2 × 0.0370)
= Exp(5.1420)
= $171.06
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 33.01% per annum.
- GE price at the close of November 19, 2024 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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