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 55.68% per annum.
- LMT price at the close of February 20, 2025 was $436.29 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 85.37% per annum.
- LMT price at the close of February 20, 2025 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 LMT 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: September 27, 2024
End date: February 20, 2025
a = 10.1494
b = -0.0022
s = 0.0290
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0022) – 1
= -55.68%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0290) – 1
= 12.29%
September 27, 2024 calculations
Top border of price channel:
Exp(Y1,158)
= Exp(a + b × X1,158 + 2 × s)
= Exp(a + b × 1,680 + 2 × s)
= Exp(10.1494 + -0.0022 × 1,680 + 2 × 0.0290)
= Exp(6.4624)
= $640.60
Bottom border of price channel:
Exp(Y1,158)
= Exp(a + b × X1,158 – 2 × s)
= Exp(a + b × 1,680 – 2 × s)
= Exp(10.1494 + -0.0022 × 1,680 – 2 × 0.0290)
= Exp(6.3465)
= $570.50
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(10.1494 + -0.0022 × 1,826 + 2 × 0.0290)
= Exp(6.1369)
= $462.64
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(10.1494 + -0.0022 × 1,826 – 2 × 0.0290)
= Exp(6.0211)
= $412.02
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 55.68% per annum.
- LMT price at the close of February 20, 2025 was $436.29 and was inside the primary price channel.
Secondary Trend
Start date: January 21, 2025
End date: February 20, 2025
a = 15.6602
b = -0.0053
s = 0.0245
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0053) – 1
= -85.37%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0245) – 1
= 10.31%
January 21, 2025 calculations
Top border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 + 2 × s)
= Exp(a + b × 1,796 + 2 × s)
= Exp(15.6602 + -0.0053 × 1,796 + 2 × 0.0245)
= Exp(6.2515)
= $518.78
Bottom border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 – 2 × s)
= Exp(a + b × 1,796 – 2 × s)
= Exp(15.6602 + -0.0053 × 1,796 – 2 × 0.0245)
= Exp(6.1534)
= $470.31
February 20, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(15.6602 + -0.0053 × 1,826 + 2 × 0.0245)
= Exp(6.0935)
= $442.97
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(15.6602 + -0.0053 × 1,826 – 2 × 0.0245)
= Exp(5.9954)
= $401.58
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 85.37% per annum.
- LMT price at the close of February 20, 2025 was inside the secondary price channel.
- Discover a new approach to trend analysis.
- Check the power of mathematical statistics.
- Price channels have never been so accurately estimated.
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