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 186.34% per annum.
- WSM price at the close of May 24, 2024 was $287.81 and was inside the primary price channel.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 9.50% per annum.
- WSM price at the close of May 24, 2024 was inside the secondary price channel.
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 WSM 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: May 8, 2023
End date: May 24, 2024
a = 0.4754
b = 0.0029
s = 0.0714
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0029) – 1
= 186.34%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0714) – 1
= 33.04%
May 8, 2023 calculations
Top border of price channel:
Exp(Y994)
= Exp(a + b × X994 + 2 × s)
= Exp(a + b × 1,441 + 2 × s)
= Exp(0.4754 + 0.0029 × 1,441 + 2 × 0.0714)
= Exp(4.7714)
= $118.08
Bottom border of price channel:
Exp(Y994)
= Exp(a + b × X994 – 2 × s)
= Exp(a + b × 1,441 – 2 × s)
= Exp(0.4754 + 0.0029 × 1,441 – 2 × 0.0714)
= Exp(4.4859)
= $88.75
May 24, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(0.4754 + 0.0029 × 1,823 + 2 × 0.0714)
= Exp(5.8724)
= $355.09
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(0.4754 + 0.0029 × 1,823 – 2 × 0.0714)
= Exp(5.5869)
= $266.90
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 186.34% per annum.
- WSM price at the close of May 24, 2024 was $287.81 and was inside the primary price channel.
Secondary Trend
Start date: March 13, 2024
End date: May 24, 2024
a = 5.2523
b = 0.0002
s = 0.0465
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 9.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0465) – 1
= 20.44%
March 13, 2024 calculations
Top border of price channel:
Exp(Y1,207)
= Exp(a + b × X1,207 + 2 × s)
= Exp(a + b × 1,751 + 2 × s)
= Exp(5.2523 + 0.0002 × 1,751 + 2 × 0.0465)
= Exp(5.7805)
= $323.93
Bottom border of price channel:
Exp(Y1,207)
= Exp(a + b × X1,207 – 2 × s)
= Exp(a + b × 1,751 – 2 × s)
= Exp(5.2523 + 0.0002 × 1,751 – 2 × 0.0465)
= Exp(5.5946)
= $268.96
May 24, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,823 + 2 × s)
= Exp(5.2523 + 0.0002 × 1,823 + 2 × 0.0465)
= Exp(5.7984)
= $329.78
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(5.2523 + 0.0002 × 1,823 – 2 × 0.0465)
= Exp(5.6125)
= $273.82
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 9.50% per annum.
- WSM price at the close of May 24, 2024 was inside the secondary price channel.
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