Stock Price Trends
Stock price trends estimated using linear regression.
Summary
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 36.50% per annum.
- GME price at the close of May 17, 2024 was $22.21 and was higher than the top border of the primary price channel by $4.34 (24.32%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 516,186.87% per annum.
- GME price at the close of May 17, 2024 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 GME 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: March 8, 2021
End date: May 8, 2024
a = 4.8080
b = -0.0012
s = 0.1721
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0012) – 1
= -36.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1721) – 1
= 99.08%
March 8, 2021 calculations
Top border of price channel:
Exp(Y453)
= Exp(a + b × X453 + 2 × s)
= Exp(a + b × 658 + 2 × s)
= Exp(4.8080 + -0.0012 × 658 + 2 × 0.1721)
= Exp(4.3336)
= $76.22
Bottom border of price channel:
Exp(Y453)
= Exp(a + b × X453 – 2 × s)
= Exp(a + b × 658 – 2 × s)
= Exp(4.8080 + -0.0012 × 658 – 2 × 0.1721)
= Exp(3.6451)
= $38.29
May 8, 2024 calculations
Top border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 + 2 × s)
= Exp(a + b × 1,815 + 2 × s)
= Exp(4.8080 + -0.0012 × 1,815 + 2 × 0.1721)
= Exp(2.8941)
= $18.07
Bottom border of price channel:
Exp(Y1,251)
= Exp(a + b × X1,251 – 2 × s)
= Exp(a + b × 1,815 – 2 × s)
= Exp(4.8080 + -0.0012 × 1,815 – 2 × 0.1721)
= Exp(2.2055)
= $9.08
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 36.50% per annum.
- GME price at the close of May 17, 2024 was $22.21 and was higher than the top border of the primary price channel by $4.34 (24.32%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 15, 2024
End date: May 10, 2024
a = -39.7544
b = 0.0234
s = 0.1003
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0234) – 1
= 516,186.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1003) – 1
= 49.38%
April 15, 2024 calculations
Top border of price channel:
Exp(Y1,234)
= Exp(a + b × X1,234 + 2 × s)
= Exp(a + b × 1,792 + 2 × s)
= Exp(-39.7544 + 0.0234 × 1,792 + 2 × 0.1003)
= Exp(2.4195)
= $11.24
Bottom border of price channel:
Exp(Y1,234)
= Exp(a + b × X1,234 – 2 × s)
= Exp(a + b × 1,792 – 2 × s)
= Exp(-39.7544 + 0.0234 × 1,792 – 2 × 0.1003)
= Exp(2.0182)
= $7.52
May 10, 2024 calculations
Top border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 + 2 × s)
= Exp(a + b × 1,817 + 2 × s)
= Exp(-39.7544 + 0.0234 × 1,817 + 2 × 0.1003)
= Exp(3.0051)
= $20.19
Bottom border of price channel:
Exp(Y1,253)
= Exp(a + b × X1,253 – 2 × s)
= Exp(a + b × 1,817 – 2 × s)
= Exp(-39.7544 + 0.0234 × 1,817 – 2 × 0.1003)
= Exp(2.6038)
= $13.51
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 516,186.87% per annum.
- GME price at the close of May 17, 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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