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 57.20% per annum.
- CRM price at the close of November 19, 2024 was $323.43 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 11.30% per annum.
- CRM price at the close of November 19, 2024 was higher than the top border of the secondary price channel by $34.49 (11.94%). This indicates a possible reversal in the secondary trend direction.
- 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 CRM 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: August 26, 2022
End date: May 24, 2024
a = 3.6736
b = 0.0012
s = 0.0835
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 57.20%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0835) – 1
= 39.64%
August 26, 2022 calculations
Top border of price channel:
Exp(Y696)
= Exp(a + b × X696 + 2 × s)
= Exp(a + b × 1,010 + 2 × s)
= Exp(3.6736 + 0.0012 × 1,010 + 2 × 0.0835)
= Exp(5.0923)
= $162.76
Bottom border of price channel:
Exp(Y696)
= Exp(a + b × X696 – 2 × s)
= Exp(a + b × 1,010 – 2 × s)
= Exp(3.6736 + 0.0012 × 1,010 – 2 × 0.0835)
= Exp(4.7584)
= $116.56
May 24, 2024 calculations
Top border of price channel:
Exp(Y1,134)
= Exp(a + b × X1,134 + 2 × s)
= Exp(a + b × 1,647 + 2 × s)
= Exp(3.6736 + 0.0012 × 1,647 + 2 × 0.0835)
= Exp(5.8817)
= $358.43
Bottom border of price channel:
Exp(Y1,134)
= Exp(a + b × X1,134 – 2 × s)
= Exp(a + b × 1,647 – 2 × s)
= Exp(3.6736 + 0.0012 × 1,647 – 2 × 0.0835)
= Exp(5.5479)
= $256.69
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 57.20% per annum.
- CRM price at the close of November 19, 2024 was $323.43 and was inside the primary price channel.
Secondary Trend
Start date: November 30, 2023
End date: October 1, 2024
a = 6.1238
b = -0.0003
s = 0.0713
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0003) – 1
= -11.30%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0713) – 1
= 32.98%
November 30, 2023 calculations
Top border of price channel:
Exp(Y1,013)
= Exp(a + b × X1,013 + 2 × s)
= Exp(a + b × 1,471 + 2 × s)
= Exp(6.1238 + -0.0003 × 1,471 + 2 × 0.0713)
= Exp(5.7829)
= $324.69
Bottom border of price channel:
Exp(Y1,013)
= Exp(a + b × X1,013 – 2 × s)
= Exp(a + b × 1,471 – 2 × s)
= Exp(6.1238 + -0.0003 × 1,471 – 2 × 0.0713)
= Exp(5.4979)
= $244.17
October 1, 2024 calculations
Top border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 + 2 × s)
= Exp(a + b × 1,777 + 2 × s)
= Exp(6.1238 + -0.0003 × 1,777 + 2 × 0.0713)
= Exp(5.6823)
= $293.63
Bottom border of price channel:
Exp(Y1,222)
= Exp(a + b × X1,222 – 2 × s)
= Exp(a + b × 1,777 – 2 × s)
= Exp(6.1238 + -0.0003 × 1,777 – 2 × 0.0713)
= Exp(5.3973)
= $220.81
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 11.30% per annum.
- CRM price at the close of November 19, 2024 was higher than the top border of the secondary price channel by $34.49 (11.94%). This indicates a possible reversal in the secondary trend direction.
- 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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