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 43.37% per annum.
- ORCL price at the close of March 26, 2025 was $147.80 and was lower than the bottom border of the primary price channel by $5.64 (3.67%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 39.58% per annum.
- ORCL price at the close of March 26, 2025 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 ORCL 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: May 5, 2022
End date: February 28, 2025
a = 3.4042
b = 0.0010
s = 0.0861
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0010) – 1
= 43.37%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0861) – 1
= 41.09%
May 5, 2022 calculations
Top border of price channel:
Exp(Y531)
= Exp(a + b × X531 + 2 × s)
= Exp(a + b × 769 + 2 × s)
= Exp(3.4042 + 0.0010 × 769 + 2 × 0.0861)
= Exp(4.3353)
= $76.35
Bottom border of price channel:
Exp(Y531)
= Exp(a + b × X531 – 2 × s)
= Exp(a + b × 769 – 2 × s)
= Exp(3.4042 + 0.0010 × 769 – 2 × 0.0861)
= Exp(3.9910)
= $54.11
February 28, 2025 calculations
Top border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 + 2 × s)
= Exp(a + b × 1,799 + 2 × s)
= Exp(3.4042 + 0.0010 × 1,799 + 2 × 0.0861)
= Exp(5.3519)
= $211.01
Bottom border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 – 2 × s)
= Exp(a + b × 1,799 – 2 × s)
= Exp(3.4042 + 0.0010 × 1,799 – 2 × 0.0861)
= Exp(5.0076)
= $149.55
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 43.37% per annum.
- ORCL price at the close of March 26, 2025 was $147.80 and was lower than the bottom border of the primary price channel by $5.64 (3.67%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: November 6, 2024
End date: March 26, 2025
a = 7.5597
b = -0.0014
s = 0.0499
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0014) – 1
= -39.58%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0499) – 1
= 22.09%
November 6, 2024 calculations
Top border of price channel:
Exp(Y1,161)
= Exp(a + b × X1,161 + 2 × s)
= Exp(a + b × 1,685 + 2 × s)
= Exp(7.5597 + -0.0014 × 1,685 + 2 × 0.0499)
= Exp(5.3332)
= $207.10
Bottom border of price channel:
Exp(Y1,161)
= Exp(a + b × X1,161 – 2 × s)
= Exp(a + b × 1,685 – 2 × s)
= Exp(7.5597 + -0.0014 × 1,685 – 2 × 0.0499)
= Exp(5.1336)
= $169.63
March 26, 2025 calculations
Top border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(7.5597 + -0.0014 × 1,825 + 2 × 0.0499)
= Exp(5.1399)
= $170.70
Bottom border of price channel:
Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(7.5597 + -0.0014 × 1,825 – 2 × 0.0499)
= Exp(4.9403)
= $139.82
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 39.58% per annum.
- ORCL price at the close of March 26, 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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