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 45.83% per annum.
- HUBB price at the close of November 1, 2023 was $279.10 and was lower than the bottom border of the primary price channel by $12.17 (4.18%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.30% per annum.
- HUBB price at the close of November 1, 2023 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 HUBB 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: February 10, 2022
End date: October 12, 2023
a = 3.9167
b = 0.0010
s = 0.0643
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0010) – 1
= 45.83%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0643) – 1
= 29.34%
February 10, 2022 calculations
Top border of price channel:
Exp(Y823)
= Exp(a + b × X823 + 2 × s)
= Exp(a + b × 1,196 + 2 × s)
= Exp(3.9167 + 0.0010 × 1,196 + 2 × 0.0643)
= Exp(5.2814)
= $196.65
Bottom border of price channel:
Exp(Y823)
= Exp(a + b × X823 – 2 × s)
= Exp(a + b × 1,196 – 2 × s)
= Exp(3.9167 + 0.0010 × 1,196 – 2 × 0.0643)
= Exp(5.0242)
= $152.04
October 12, 2023 calculations
Top border of price channel:
Exp(Y1,242)
= Exp(a + b × X1,242 + 2 × s)
= Exp(a + b × 1,805 + 2 × s)
= Exp(3.9167 + 0.0010 × 1,805 + 2 × 0.0643)
= Exp(5.9108)
= $369.02
Bottom border of price channel:
Exp(Y1,242)
= Exp(a + b × X1,242 – 2 × s)
= Exp(a + b × 1,805 – 2 × s)
= Exp(3.9167 + 0.0010 × 1,805 – 2 × 0.0643)
= Exp(5.6536)
= $285.32
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 45.83% per annum.
- HUBB price at the close of November 1, 2023 was $279.10 and was lower than the bottom border of the primary price channel by $12.17 (4.18%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 15, 2023
End date: November 1, 2023
a = 7.2796
b = -0.0009
s = 0.0349
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0009) – 1
= -27.30%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0349) – 1
= 14.99%
June 15, 2023 calculations
Top border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 + 2 × s)
= Exp(a + b × 1,686 + 2 × s)
= Exp(7.2796 + -0.0009 × 1,686 + 2 × 0.0349)
= Exp(5.8769)
= $356.70
Bottom border of price channel:
Exp(Y1,160)
= Exp(a + b × X1,160 – 2 × s)
= Exp(a + b × 1,686 – 2 × s)
= Exp(7.2796 + -0.0009 × 1,686 – 2 × 0.0349)
= Exp(5.7372)
= $310.19
November 1, 2023 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(7.2796 + -0.0009 × 1,825 + 2 × 0.0349)
= Exp(5.7555)
= $315.92
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(7.2796 + -0.0009 × 1,825 – 2 × 0.0349)
= Exp(5.6158)
= $274.72
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 27.30% per annum.
- HUBB price at the close of November 1, 2023 was inside the secondary price channel.
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