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 58.33% per annum.
- HES price at the close of November 2, 2023 was $147.76 and was lower than the bottom border of the primary price channel by $14.64 (9.02%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 11.21% per annum.
- HES price at the close of November 2, 2023 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 HES 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 9, 2020
End date: March 9, 2023
a = 3.0429
b = 0.0013
s = 0.1239
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 58.33%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1239) – 1
= 64.16%
March 9, 2020 calculations
Top border of price channel:
Exp(Y335)
= Exp(a + b × X335 + 2 × s)
= Exp(a + b × 490 + 2 × s)
= Exp(3.0429 + 0.0013 × 490 + 2 × 0.1239)
= Exp(3.9076)
= $49.78
Bottom border of price channel:
Exp(Y335)
= Exp(a + b × X335 – 2 × s)
= Exp(a + b × 490 – 2 × s)
= Exp(3.0429 + 0.0013 × 490 – 2 × 0.1239)
= Exp(3.4119)
= $30.32
March 9, 2023 calculations
Top border of price channel:
Exp(Y1,091)
= Exp(a + b × X1,091 + 2 × s)
= Exp(a + b × 1,585 + 2 × s)
= Exp(3.0429 + 0.0013 × 1,585 + 2 × 0.1239)
= Exp(5.2861)
= $197.57
Bottom border of price channel:
Exp(Y1,091)
= Exp(a + b × X1,091 – 2 × s)
= Exp(a + b × 1,585 – 2 × s)
= Exp(3.0429 + 0.0013 × 1,585 – 2 × 0.1239)
= Exp(4.7904)
= $120.35
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 58.33% per annum.
- HES price at the close of November 2, 2023 was $147.76 and was lower than the bottom border of the primary price channel by $14.64 (9.02%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: October 4, 2022
End date: November 2, 2023
a = 4.4808
b = 0.0003
s = 0.0641
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 11.21%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0641) – 1
= 29.23%
October 4, 2022 calculations
Top border of price channel:
Exp(Y984)
= Exp(a + b × X984 + 2 × s)
= Exp(a + b × 1,429 + 2 × s)
= Exp(4.4808 + 0.0003 × 1,429 + 2 × 0.0641)
= Exp(5.0251)
= $152.18
Bottom border of price channel:
Exp(Y984)
= Exp(a + b × X984 – 2 × s)
= Exp(a + b × 1,429 – 2 × s)
= Exp(4.4808 + 0.0003 × 1,429 – 2 × 0.0641)
= Exp(4.7687)
= $117.77
November 2, 2023 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(4.4808 + 0.0003 × 1,823 + 2 × 0.0641)
= Exp(5.1398)
= $170.69
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(4.4808 + 0.0003 × 1,823 – 2 × 0.0641)
= Exp(4.8834)
= $132.08
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 11.21% per annum.
- HES price at the close of November 2, 2023 was inside the secondary price channel.
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