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 56.70% per annum.
- NOW price at the close of February 20, 2025 was $967.98 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.53% per annum.
- NOW price at the close of February 20, 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 NOW 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 21, 2022
End date: February 18, 2025
a = 4.7544
b = 0.0012
s = 0.0684
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 56.70%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0684) – 1
= 31.45%
September 21, 2022 calculations
Top border of price channel:
Exp(Y651)
= Exp(a + b × X651 + 2 × s)
= Exp(a + b × 943 + 2 × s)
= Exp(4.7544 + 0.0012 × 943 + 2 × 0.0684)
= Exp(6.0515)
= $424.77
Bottom border of price channel:
Exp(Y651)
= Exp(a + b × X651 – 2 × s)
= Exp(a + b × 943 – 2 × s)
= Exp(4.7544 + 0.0012 × 943 – 2 × 0.0684)
= Exp(5.7781)
= $323.14
February 18, 2025 calculations
Top border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.7544 + 0.0012 × 1,824 + 2 × 0.0684)
= Exp(7.1357)
= $1,255.96
Bottom border of price channel:
Exp(Y1,254)
= Exp(a + b × X1,254 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.7544 + 0.0012 × 1,824 – 2 × 0.0684)
= Exp(6.8622)
= $955.45
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 56.70% per annum.
- NOW price at the close of February 20, 2025 was $967.98 and was inside the primary price channel.
Secondary Trend
Start date: December 4, 2024
End date: February 20, 2025
a = 9.6005
b = -0.0015
s = 0.0368
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0015) – 1
= -41.53%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0368) – 1
= 15.85%
December 4, 2024 calculations
Top border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 + 2 × s)
= Exp(a + b × 1,748 + 2 × s)
= Exp(9.6005 + -0.0015 × 1,748 + 2 × 0.0368)
= Exp(7.1038)
= $1,216.63
Bottom border of price channel:
Exp(Y1,205)
= Exp(a + b × X1,205 – 2 × s)
= Exp(a + b × 1,748 – 2 × s)
= Exp(9.6005 + -0.0015 × 1,748 – 2 × 0.0368)
= Exp(6.9567)
= $1,050.14
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(9.6005 + -0.0015 × 1,826 + 2 × 0.0368)
= Exp(6.9891)
= $1,084.80
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.6005 + -0.0015 × 1,826 – 2 × 0.0368)
= Exp(6.8420)
= $936.35
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 41.53% per annum.
- NOW 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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