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 36.30% per annum.
- WM price at the close of February 15, 2022 was $142.68 and was lower than the bottom border of the primary price channel by $15.56 (9.83%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 71.08% per annum.
- WM price at the close of February 15, 2022 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 WM 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 19, 2020
End date: January 12, 2022
a = 3.5974
b = 0.0008
s = 0.0408
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0008) – 1
= 36.30%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0408) – 1
= 17.75%
March 19, 2020 calculations
Top border of price channel:
Exp(Y776)
= Exp(a + b × X776 + 2 × s)
= Exp(a + b × 1,127 + 2 × s)
= Exp(3.5974 + 0.0008 × 1,127 + 2 × 0.0408)
= Exp(4.6353)
= $103.06
Bottom border of price channel:
Exp(Y776)
= Exp(a + b × X776 – 2 × s)
= Exp(a + b × 1,127 – 2 × s)
= Exp(3.5974 + 0.0008 × 1,127 – 2 × 0.0408)
= Exp(4.4719)
= $87.52
January 12, 2022 calculations
Top border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 + 2 × s)
= Exp(a + b × 1,791 + 2 × s)
= Exp(3.5974 + 0.0008 × 1,791 + 2 × 0.0408)
= Exp(5.1986)
= $181.03
Bottom border of price channel:
Exp(Y1,235)
= Exp(a + b × X1,235 – 2 × s)
= Exp(a + b × 1,791 – 2 × s)
= Exp(3.5974 + 0.0008 × 1,791 – 2 × 0.0408)
= Exp(5.0353)
= $153.74
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 36.30% per annum.
- WM price at the close of February 15, 2022 was $142.68 and was lower than the bottom border of the primary price channel by $15.56 (9.83%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: December 28, 2021
End date: February 15, 2022
a = 11.1514
b = -0.0034
s = 0.0108
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0034) – 1
= -71.08%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0108) – 1
= 4.41%
December 28, 2021 calculations
Top border of price channel:
Exp(Y1,224)
= Exp(a + b × X1,224 + 2 × s)
= Exp(a + b × 1,776 + 2 × s)
= Exp(11.1514 + -0.0034 × 1,776 + 2 × 0.0108)
= Exp(5.1363)
= $170.09
Bottom border of price channel:
Exp(Y1,224)
= Exp(a + b × X1,224 – 2 × s)
= Exp(a + b × 1,776 – 2 × s)
= Exp(11.1514 + -0.0034 × 1,776 – 2 × 0.0108)
= Exp(5.0932)
= $162.91
February 15, 2022 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(11.1514 + -0.0034 × 1,825 + 2 × 0.0108)
= Exp(4.9698)
= $143.99
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(11.1514 + -0.0034 × 1,825 – 2 × 0.0108)
= Exp(4.9266)
= $137.91
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 71.08% per annum.
- WM price at the close of February 15, 2022 was inside the secondary price channel.
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