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 63.58% per annum.
- LVS price at the close of October 20, 2023 was $45.32 and was lower than the bottom border of the primary price channel by $13.11 (22.43%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 70.71% per annum.
- LVS price at the close of October 20, 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 LVS 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 7, 2022
End date: August 11, 2023
a = 1.7991
b = 0.0013
s = 0.0953
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0013) – 1
= 63.58%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0953) – 1
= 46.42%
March 7, 2022 calculations
Top border of price channel:
Exp(Y848)
= Exp(a + b × X848 + 2 × s)
= Exp(a + b × 1,232 + 2 × s)
= Exp(1.7991 + 0.0013 × 1,232 + 2 × 0.0953)
= Exp(3.6508)
= $38.51
Bottom border of price channel:
Exp(Y848)
= Exp(a + b × X848 – 2 × s)
= Exp(a + b × 1,232 – 2 × s)
= Exp(1.7991 + 0.0013 × 1,232 – 2 × 0.0953)
= Exp(3.2696)
= $26.30
August 11, 2023 calculations
Top border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 + 2 × s)
= Exp(a + b × 1,754 + 2 × s)
= Exp(1.7991 + 0.0013 × 1,754 + 2 × 0.0953)
= Exp(4.3547)
= $77.84
Bottom border of price channel:
Exp(Y1,208)
= Exp(a + b × X1,208 – 2 × s)
= Exp(a + b × 1,754 – 2 × s)
= Exp(1.7991 + 0.0013 × 1,754 – 2 × 0.0953)
= Exp(3.9734)
= $53.16
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 63.58% per annum.
- LVS price at the close of October 20, 2023 was $45.32 and was lower than the bottom border of the primary price channel by $13.11 (22.43%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: July 12, 2023
End date: October 20, 2023
a = 9.9155
b = -0.0034
s = 0.0296
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0034) – 1
= -70.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0296) – 1
= 12.55%
July 12, 2023 calculations
Top border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 + 2 × s)
= Exp(a + b × 1,724 + 2 × s)
= Exp(9.9155 + -0.0034 × 1,724 + 2 × 0.0296)
= Exp(4.1746)
= $65.02
Bottom border of price channel:
Exp(Y1,186)
= Exp(a + b × X1,186 – 2 × s)
= Exp(a + b × 1,724 – 2 × s)
= Exp(9.9155 + -0.0034 × 1,724 – 2 × 0.0296)
= Exp(4.0564)
= $57.77
October 20, 2023 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.9155 + -0.0034 × 1,824 + 2 × 0.0296)
= Exp(3.8382)
= $46.44
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.9155 + -0.0034 × 1,824 – 2 × 0.0296)
= Exp(3.7200)
= $41.26
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 70.71% per annum.
- LVS price at the close of October 20, 2023 was inside the secondary price channel.
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