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 15.99% per annum.
- TT price at the close of May 3, 2023 was $177.74 and was higher than the top border of the primary price channel by $17.09 (10.64%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 53.14% per annum.
- TT price at the close of May 3, 2023 was lower than the bottom border of the secondary price channel by $1.57 (0.88%). 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 TT 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 1, 2021
End date: November 2, 2022
a = 5.7491
b = -0.0005
s = 0.1007
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0005) – 1
= -15.99%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1007) – 1
= 49.59%
March 1, 2021 calculations
Top border of price channel:
Exp(Y709)
= Exp(a + b × X709 + 2 × s)
= Exp(a + b × 1,032 + 2 × s)
= Exp(5.7491 + -0.0005 × 1,032 + 2 × 0.1007)
= Exp(5.4578)
= $234.58
Bottom border of price channel:
Exp(Y709)
= Exp(a + b × X709 – 2 × s)
= Exp(a + b × 1,032 – 2 × s)
= Exp(5.7491 + -0.0005 × 1,032 – 2 × 0.1007)
= Exp(5.0551)
= $156.81
November 2, 2022 calculations
Top border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 + 2 × s)
= Exp(a + b × 1,643 + 2 × s)
= Exp(5.7491 + -0.0005 × 1,643 + 2 × 0.1007)
= Exp(5.1661)
= $175.23
Bottom border of price channel:
Exp(Y1,133)
= Exp(a + b × X1,133 – 2 × s)
= Exp(a + b × 1,643 – 2 × s)
= Exp(5.7491 + -0.0005 × 1,643 – 2 × 0.1007)
= Exp(4.7634)
= $117.14
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 15.99% per annum.
- TT price at the close of May 3, 2023 was $177.74 and was higher than the top border of the primary price channel by $17.09 (10.64%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 29, 2022
End date: April 3, 2023
a = 3.1654
b = 0.0012
s = 0.0536
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0012) – 1
= 53.14%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0536) – 1
= 23.90%
April 29, 2022 calculations
Top border of price channel:
Exp(Y1,004)
= Exp(a + b × X1,004 + 2 × s)
= Exp(a + b × 1,456 + 2 × s)
= Exp(3.1654 + 0.0012 × 1,456 + 2 × 0.0536)
= Exp(4.9726)
= $144.39
Bottom border of price channel:
Exp(Y1,004)
= Exp(a + b × X1,004 – 2 × s)
= Exp(a + b × 1,456 – 2 × s)
= Exp(3.1654 + 0.0012 × 1,456 – 2 × 0.0536)
= Exp(4.7583)
= $116.54
April 3, 2023 calculations
Top border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 + 2 × s)
= Exp(a + b × 1,795 + 2 × s)
= Exp(3.1654 + 0.0012 × 1,795 + 2 × 0.0536)
= Exp(5.3684)
= $214.51
Bottom border of price channel:
Exp(Y1,236)
= Exp(a + b × X1,236 – 2 × s)
= Exp(a + b × 1,795 – 2 × s)
= Exp(3.1654 + 0.0012 × 1,795 – 2 × 0.0536)
= Exp(5.1541)
= $173.14
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 53.14% per annum.
- TT price at the close of May 3, 2023 was lower than the bottom border of the secondary price channel by $1.57 (0.88%). This indicates a possible reversal in the secondary trend direction.
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