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 96.50% per annum.
- HCA price at the close of May 3, 2022 was $216.30 and was lower than the bottom border of the primary price channel by $124.94 (36.61%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 3.54% per annum.
- HCA price at the close of May 3, 2022 was lower than the bottom border of the secondary price channel by $19.66 (8.33%). This indicates a possible reversal in the secondary trend direction.
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 HCA 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 11, 2020
End date: October 22, 2021
a = 2.5894
b = 0.0019
s = 0.0671
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0019) – 1
= 96.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0671) – 1
= 30.78%
March 11, 2020 calculations
Top border of price channel:
Exp(Y717)
= Exp(a + b × X717 + 2 × s)
= Exp(a + b × 1,042 + 2 × s)
= Exp(2.5894 + 0.0019 × 1,042 + 2 × 0.0671)
= Exp(4.6519)
= $104.79
Bottom border of price channel:
Exp(Y717)
= Exp(a + b × X717 – 2 × s)
= Exp(a + b × 1,042 – 2 × s)
= Exp(2.5894 + 0.0019 × 1,042 – 2 × 0.0671)
= Exp(4.3836)
= $80.12
October 22, 2021 calculations
Top border of price channel:
Exp(Y1,126)
= Exp(a + b × X1,126 + 2 × s)
= Exp(a + b × 1,632 + 2 × s)
= Exp(2.5894 + 0.0019 × 1,632 + 2 × 0.0671)
= Exp(5.7438)
= $312.24
Bottom border of price channel:
Exp(Y1,126)
= Exp(a + b × X1,126 – 2 × s)
= Exp(a + b × 1,632 – 2 × s)
= Exp(2.5894 + 0.0019 × 1,632 – 2 × 0.0671)
= Exp(5.4754)
= $238.75
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 96.50% per annum.
- HCA price at the close of May 3, 2022 was $216.30 and was lower than the bottom border of the primary price channel by $124.94 (36.61%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 20, 2021
End date: April 19, 2022
a = 5.3577
b = 0.0001
s = 0.0341
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 3.54%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0341) – 1
= 14.61%
July 20, 2021 calculations
Top border of price channel:
Exp(Y1,059)
= Exp(a + b × X1,059 + 2 × s)
= Exp(a + b × 1,538 + 2 × s)
= Exp(5.3577 + 0.0001 × 1,538 + 2 × 0.0341)
= Exp(5.5726)
= $263.13
Bottom border of price channel:
Exp(Y1,059)
= Exp(a + b × X1,059 – 2 × s)
= Exp(a + b × 1,538 – 2 × s)
= Exp(5.3577 + 0.0001 × 1,538 – 2 × 0.0341)
= Exp(5.4363)
= $229.59
April 19, 2022 calculations
Top border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 + 2 × s)
= Exp(a + b × 1,811 + 2 × s)
= Exp(5.3577 + 0.0001 × 1,811 + 2 × 0.0341)
= Exp(5.5987)
= $270.07
Bottom border of price channel:
Exp(Y1,248)
= Exp(a + b × X1,248 – 2 × s)
= Exp(a + b × 1,811 – 2 × s)
= Exp(5.3577 + 0.0001 × 1,811 – 2 × 0.0341)
= Exp(5.4623)
= $235.65
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 3.54% per annum.
- HCA price at the close of May 3, 2022 was lower than the bottom border of the secondary price channel by $19.66 (8.33%). This indicates a possible reversal in the secondary trend direction.
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