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 June 11, 2024 was $30.49 and was higher than the top border of the primary price channel by $13.17 (76.06%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 82,054.87% per annum.
- GME price at the close of June 11, 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 = 4.7795
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(Y437)
= Exp(a + b × X437 + 2 × s)
= Exp(a + b × 635 + 2 × s)
= Exp(4.7795 + -0.0012 × 635 + 2 × 0.1721)
= Exp(4.3336)
= $76.22
Bottom border of price channel:
Exp(Y437)
= Exp(a + b × X437 – 2 × s)
= Exp(a + b × 635 – 2 × s)
= Exp(4.7795 + -0.0012 × 635 – 2 × 0.1721)
= Exp(3.6451)
= $38.29
May 8, 2024 calculations
Top border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 + 2 × s)
= Exp(a + b × 1,792 + 2 × s)
= Exp(4.7795 + -0.0012 × 1,792 + 2 × 0.1721)
= Exp(2.8941)
= $18.07
Bottom border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 – 2 × s)
= Exp(a + b × 1,792 – 2 × s)
= Exp(4.7795 + -0.0012 × 1,792 – 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 June 11, 2024 was $30.49 and was higher than the top border of the primary price channel by $13.17 (76.06%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 2, 2024
End date: June 11, 2024
a = -30.0998
b = 0.0184
s = 0.2492
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0184) – 1
= 82,054.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.2492) – 1
= 170.95%
April 2, 2024 calculations
Top border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 + 2 × s)
= Exp(a + b × 1,756 + 2 × s)
= Exp(-30.0998 + 0.0184 × 1,756 + 2 × 0.2492)
= Exp(2.6859)
= $14.67
Bottom border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 – 2 × s)
= Exp(a + b × 1,756 – 2 × s)
= Exp(-30.0998 + 0.0184 × 1,756 – 2 × 0.2492)
= Exp(1.6891)
= $5.41
June 11, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(-30.0998 + 0.0184 × 1,826 + 2 × 0.2492)
= Exp(3.9730)
= $53.14
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-30.0998 + 0.0184 × 1,826 – 2 × 0.2492)
= Exp(2.9762)
= $19.61
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 82,054.87% per annum.
- GME price at the close of June 11, 2024 was inside the secondary price channel.
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