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 96.76% per annum.
- RCL price at the close of July 29, 2022 was $38.71 and was higher than the top border of the primary price channel by $2.38 (6.56%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 52.29% per annum.
- RCL price at the close of July 29, 2022 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 RCL 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 29, 2022
End date: July 27, 2022
a = 20.5334
b = -0.0094
s = 0.0980
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0094) – 1
= -96.76%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0980) – 1
= 48.01%
March 29, 2022 calculations
Top border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 + 2 × s)
= Exp(a + b × 1,702 + 2 × s)
= Exp(20.5334 + -0.0094 × 1,702 + 2 × 0.0980)
= Exp(4.7388)
= $114.30
Bottom border of price channel:
Exp(Y1,174)
= Exp(a + b × X1,174 – 2 × s)
= Exp(a + b × 1,702 – 2 × s)
= Exp(20.5334 + -0.0094 × 1,702 – 2 × 0.0980)
= Exp(4.3467)
= $77.23
July 27, 2022 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,822 + 2 × s)
= Exp(20.5334 + -0.0094 × 1,822 + 2 × 0.0980)
= Exp(3.6114)
= $37.02
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,822 – 2 × s)
= Exp(20.5334 + -0.0094 × 1,822 – 2 × 0.0980)
= Exp(3.2193)
= $25.01
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 96.76% per annum.
- RCL price at the close of July 29, 2022 was $38.71 and was higher than the top border of the primary price channel by $2.38 (6.56%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 14, 2022
End date: July 29, 2022
a = 7.2349
b = -0.0020
s = 0.0663
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0020) – 1
= -52.29%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0663) – 1
= 30.39%
June 14, 2022 calculations
Top border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 + 2 × s)
= Exp(a + b × 1,779 + 2 × s)
= Exp(7.2349 + -0.0020 × 1,779 + 2 × 0.0663)
= Exp(3.7607)
= $42.98
Bottom border of price channel:
Exp(Y1,227)
= Exp(a + b × X1,227 – 2 × s)
= Exp(a + b × 1,779 – 2 × s)
= Exp(7.2349 + -0.0020 × 1,779 – 2 × 0.0663)
= Exp(3.4953)
= $32.96
July 29, 2022 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(7.2349 + -0.0020 × 1,824 + 2 × 0.0663)
= Exp(3.6695)
= $39.23
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(7.2349 + -0.0020 × 1,824 – 2 × 0.0663)
= Exp(3.4041)
= $30.09
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 52.29% per annum.
- RCL price at the close of July 29, 2022 was inside the secondary price channel.
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