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 17.18% per annum.
- NEM price at the close of April 29, 2024 was $42.00 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 415.71% per annum.
- NEM price at the close of April 29, 2024 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 NEM 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: April 1, 2021
End date: April 24, 2024
a = 4.4971
b = -0.0005
s = 0.1259
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0005) – 1
= -17.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1259) – 1
= 65.48%
April 1, 2021 calculations
Top border of price channel:
Exp(Y485)
= Exp(a + b × X485 + 2 × s)
= Exp(a + b × 702 + 2 × s)
= Exp(4.4971 + -0.0005 × 702 + 2 × 0.1259)
= Exp(4.3864)
= $80.35
Bottom border of price channel:
Exp(Y485)
= Exp(a + b × X485 – 2 × s)
= Exp(a + b × 702 – 2 × s)
= Exp(4.4971 + -0.0005 × 702 – 2 × 0.1259)
= Exp(3.8827)
= $48.56
April 24, 2024 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,821 + 2 × s)
= Exp(4.4971 + -0.0005 × 1,821 + 2 × 0.1259)
= Exp(3.8086)
= $45.09
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,821 – 2 × s)
= Exp(4.4971 + -0.0005 × 1,821 – 2 × 0.1259)
= Exp(3.3049)
= $27.25
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 17.18% per annum.
- NEM price at the close of April 29, 2024 was $42.00 and was inside the primary price channel.
Secondary Trend
Start date: February 22, 2024
End date: April 29, 2024
a = -4.4880
b = 0.0045
s = 0.0352
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0045) – 1
= 415.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0352) – 1
= 15.13%
February 22, 2024 calculations
Top border of price channel:
Exp(Y1,212)
= Exp(a + b × X1,212 + 2 × s)
= Exp(a + b × 1,759 + 2 × s)
= Exp(-4.4880 + 0.0045 × 1,759 + 2 × 0.0352)
= Exp(3.4877)
= $32.71
Bottom border of price channel:
Exp(Y1,212)
= Exp(a + b × X1,212 – 2 × s)
= Exp(a + b × 1,759 – 2 × s)
= Exp(-4.4880 + 0.0045 × 1,759 – 2 × 0.0352)
= Exp(3.3468)
= $28.41
April 29, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(-4.4880 + 0.0045 × 1,826 + 2 × 0.0352)
= Exp(3.7888)
= $44.20
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(-4.4880 + 0.0045 × 1,826 – 2 × 0.0352)
= Exp(3.6479)
= $38.39
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 415.71% per annum.
- NEM price at the close of April 29, 2024 was inside the secondary price channel.
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