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 76.87% per annum.
- WMT price at the close of March 28, 2025 was $85.15 and was lower than the bottom border of the primary price channel by $13.30 (13.51%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 81.44% per annum.
- WMT price at the close of March 28, 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 WMT 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: November 16, 2023
End date: March 3, 2025
a = 1.8033
b = 0.0016
s = 0.0317
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 76.87%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0317) – 1
= 13.52%
November 16, 2023 calculations
Top border of price channel:
Exp(Y916)
= Exp(a + b × X916 + 2 × s)
= Exp(a + b × 1,326 + 2 × s)
= Exp(1.8033 + 0.0016 × 1,326 + 2 × 0.0317)
= Exp(3.9383)
= $51.33
Bottom border of price channel:
Exp(Y916)
= Exp(a + b × X916 – 2 × s)
= Exp(a + b × 1,326 – 2 × s)
= Exp(1.8033 + 0.0016 × 1,326 – 2 × 0.0317)
= Exp(3.8115)
= $45.22
March 3, 2025 calculations
Top border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 + 2 × s)
= Exp(a + b × 1,799 + 2 × s)
= Exp(1.8033 + 0.0016 × 1,799 + 2 × 0.0317)
= Exp(4.6773)
= $107.48
Bottom border of price channel:
Exp(Y1,237)
= Exp(a + b × X1,237 – 2 × s)
= Exp(a + b × 1,799 – 2 × s)
= Exp(1.8033 + 0.0016 × 1,799 – 2 × 0.0317)
= Exp(4.5505)
= $94.68
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 76.87% per annum.
- WMT price at the close of March 28, 2025 was $85.15 and was lower than the bottom border of the primary price channel by $13.30 (13.51%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: February 5, 2025
End date: March 28, 2025
a = 12.8373
b = -0.0046
s = 0.0290
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0046) – 1
= -81.44%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0290) – 1
= 12.30%
February 5, 2025 calculations
Top border of price channel:
Exp(Y1,220)
= Exp(a + b × X1,220 + 2 × s)
= Exp(a + b × 1,773 + 2 × s)
= Exp(12.8373 + -0.0046 × 1,773 + 2 × 0.0290)
= Exp(4.7154)
= $111.65
Bottom border of price channel:
Exp(Y1,220)
= Exp(a + b × X1,220 – 2 × s)
= Exp(a + b × 1,773 – 2 × s)
= Exp(12.8373 + -0.0046 × 1,773 – 2 × 0.0290)
= Exp(4.5994)
= $99.42
March 28, 2025 calculations
Top border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(12.8373 + -0.0046 × 1,824 + 2 × 0.0290)
= Exp(4.4801)
= $88.24
Bottom border of price channel:
Exp(Y1,256)
= Exp(a + b × X1,256 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(12.8373 + -0.0046 × 1,824 – 2 × 0.0290)
= Exp(4.3641)
= $78.58
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 81.44% per annum.
- WMT price at the close of March 28, 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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