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 2.71% per annum.
- UNH price at the close of February 20, 2025 was $502.42 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 11.53% per annum.
- UNH price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $13.01 (2.52%). This indicates a possible reversal in the secondary trend direction.
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 UNH 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: October 22, 2021
End date: July 15, 2024
a = 6.1057
b = 0.0001
s = 0.0515
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 2.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0515) – 1
= 22.87%
October 22, 2021 calculations
Top border of price channel:
Exp(Y422)
= Exp(a + b × X422 + 2 × s)
= Exp(a + b × 609 + 2 × s)
= Exp(6.1057 + 0.0001 × 609 + 2 × 0.0515)
= Exp(6.2533)
= $519.73
Bottom border of price channel:
Exp(Y422)
= Exp(a + b × X422 – 2 × s)
= Exp(a + b × 609 – 2 × s)
= Exp(6.1057 + 0.0001 × 609 – 2 × 0.0515)
= Exp(6.0473)
= $422.98
July 15, 2024 calculations
Top border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 + 2 × s)
= Exp(a + b × 1,606 + 2 × s)
= Exp(6.1057 + 0.0001 × 1,606 + 2 × 0.0515)
= Exp(6.3263)
= $559.11
Bottom border of price channel:
Exp(Y1,105)
= Exp(a + b × X1,105 – 2 × s)
= Exp(a + b × 1,606 – 2 × s)
= Exp(6.1057 + 0.0001 × 1,606 – 2 × 0.0515)
= Exp(6.1204)
= $455.03
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 2.71% per annum.
- UNH price at the close of February 20, 2025 was $502.42 and was inside the primary price channel.
Secondary Trend
Start date: January 5, 2023
End date: December 10, 2024
a = 5.8091
b = 0.0003
s = 0.0549
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 11.53%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0549) – 1
= 24.57%
January 5, 2023 calculations
Top border of price channel:
Exp(Y724)
= Exp(a + b × X724 + 2 × s)
= Exp(a + b × 1,049 + 2 × s)
= Exp(5.8091 + 0.0003 × 1,049 + 2 × 0.0549)
= Exp(6.2325)
= $509.01
Bottom border of price channel:
Exp(Y724)
= Exp(a + b × X724 – 2 × s)
= Exp(a + b × 1,049 – 2 × s)
= Exp(5.8091 + 0.0003 × 1,049 – 2 × 0.0549)
= Exp(6.0128)
= $408.62
December 10, 2024 calculations
Top border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 + 2 × s)
= Exp(a + b × 1,754 + 2 × s)
= Exp(5.8091 + 0.0003 × 1,754 + 2 × 0.0549)
= Exp(6.4432)
= $628.38
Bottom border of price channel:
Exp(Y1,209)
= Exp(a + b × X1,209 – 2 × s)
= Exp(a + b × 1,754 – 2 × s)
= Exp(5.8091 + 0.0003 × 1,754 – 2 × 0.0549)
= Exp(6.2235)
= $504.46
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 11.53% per annum.
- UNH price at the close of February 20, 2025 was lower than the bottom border of the secondary price channel by $13.01 (2.52%). 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 UNH and 1,499 other stocks on our new website