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 5.95% per annum.
- TMO price at the close of November 19, 2024 was $509.12 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 25.86% per annum.
- TMO price at the close of November 19, 2024 was lower than the bottom border of the secondary price channel by $67.91 (11.77%). 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 TMO 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: July 22, 2021
End date: January 26, 2024
a = 6.4840
b = -0.0002
s = 0.0605
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -5.95%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0605) – 1
= 27.36%
July 22, 2021 calculations
Top border of price channel:
Exp(Y419)
= Exp(a + b × X419 + 2 × s)
= Exp(a + b × 610 + 2 × s)
= Exp(6.4840 + -0.0002 × 610 + 2 × 0.0605)
= Exp(6.5023)
= $666.70
Bottom border of price channel:
Exp(Y419)
= Exp(a + b × X419 – 2 × s)
= Exp(a + b × 610 – 2 × s)
= Exp(6.4840 + -0.0002 × 610 – 2 × 0.0605)
= Exp(6.2605)
= $523.49
January 26, 2024 calculations
Top border of price channel:
Exp(Y1,051)
= Exp(a + b × X1,051 + 2 × s)
= Exp(a + b × 1,528 + 2 × s)
= Exp(6.4840 + -0.0002 × 1,528 + 2 × 0.0605)
= Exp(6.3480)
= $571.37
Bottom border of price channel:
Exp(Y1,051)
= Exp(a + b × X1,051 – 2 × s)
= Exp(a + b × 1,528 – 2 × s)
= Exp(6.4840 + -0.0002 × 1,528 – 2 × 0.0605)
= Exp(6.1062)
= $448.63
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 5.95% per annum.
- TMO price at the close of November 19, 2024 was $509.12 and was inside the primary price channel.
Secondary Trend
Start date: September 8, 2023
End date: October 21, 2024
a = 5.3058
b = 0.0006
s = 0.0492
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0006) – 1
= 25.86%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0492) – 1
= 21.74%
September 8, 2023 calculations
Top border of price channel:
Exp(Y955)
= Exp(a + b × X955 + 2 × s)
= Exp(a + b × 1,388 + 2 × s)
= Exp(5.3058 + 0.0006 × 1,388 + 2 × 0.0492)
= Exp(6.2787)
= $533.08
Bottom border of price channel:
Exp(Y955)
= Exp(a + b × X955 – 2 × s)
= Exp(a + b × 1,388 – 2 × s)
= Exp(5.3058 + 0.0006 × 1,388 – 2 × 0.0492)
= Exp(6.0819)
= $437.87
October 21, 2024 calculations
Top border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 + 2 × s)
= Exp(a + b × 1,797 + 2 × s)
= Exp(5.3058 + 0.0006 × 1,797 + 2 × 0.0492)
= Exp(6.5364)
= $689.78
Bottom border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 – 2 × s)
= Exp(a + b × 1,797 – 2 × s)
= Exp(5.3058 + 0.0006 × 1,797 – 2 × 0.0492)
= Exp(6.3396)
= $566.58
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 25.86% per annum.
- TMO price at the close of November 19, 2024 was lower than the bottom border of the secondary price channel by $67.91 (11.77%). 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.
Check out TMO and 1,499 other stocks on our new website