Discover Financial Services (DFS)
Discover Financial Services is an American financial services company that owns and operates Discover Bank, which offers checking and savings accounts, personal loans, home equity loans, student loans and credit cards. It also owns and operates the Discover and Pulse networks, and owns Diners Club International. Discover is currently headquartered in the Chicago suburb of Riverwoods, Illinois.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 8.65% per annum.
- DFS price at the close of July 26, 2024 was $142.29 and was higher than the top border of the primary price channel by $41.85 (41.66%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 77.51% per annum.
- DFS price at the close of July 26, 2024 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 DFS 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: April 23, 2021
End date: December 7, 2023
a = 4.9050
b = -0.0002
s = 0.0782
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -8.65%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0782) – 1
= 36.75%
April 23, 2021 calculations
Top border of price channel:
Exp(Y438)
= Exp(a + b × X438 + 2 × s)
= Exp(a + b × 634 + 2 × s)
= Exp(4.9050 + -0.0002 × 634 + 2 × 0.0782)
= Exp(4.9044)
= $134.89
Bottom border of price channel:
Exp(Y438)
= Exp(a + b × X438 – 2 × s)
= Exp(a + b × 634 – 2 × s)
= Exp(4.9050 + -0.0002 × 634 – 2 × 0.0782)
= Exp(4.5915)
= $98.64
December 7, 2023 calculations
Top border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 + 2 × s)
= Exp(a + b × 1,592 + 2 × s)
= Exp(4.9050 + -0.0002 × 1,592 + 2 × 0.0782)
= Exp(4.6671)
= $106.39
Bottom border of price channel:
Exp(Y1,099)
= Exp(a + b × X1,099 – 2 × s)
= Exp(a + b × 1,592 – 2 × s)
= Exp(4.9050 + -0.0002 × 1,592 – 2 × 0.0782)
= Exp(4.3541)
= $77.80
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 8.65% per annum.
- DFS price at the close of July 26, 2024 was $142.29 and was higher than the top border of the primary price channel by $41.85 (41.66%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: August 16, 2023
End date: July 26, 2024
a = 2.0785
b = 0.0016
s = 0.0652
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0016) – 1
= 77.51%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0652) – 1
= 29.78%
August 16, 2023 calculations
Top border of price channel:
Exp(Y1,020)
= Exp(a + b × X1,020 + 2 × s)
= Exp(a + b × 1,479 + 2 × s)
= Exp(2.0785 + 0.0016 × 1,479 + 2 × 0.0652)
= Exp(4.5340)
= $93.13
Bottom border of price channel:
Exp(Y1,020)
= Exp(a + b × X1,020 – 2 × s)
= Exp(a + b × 1,479 – 2 × s)
= Exp(2.0785 + 0.0016 × 1,479 – 2 × 0.0652)
= Exp(4.2734)
= $71.76
July 26, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(2.0785 + 0.0016 × 1,824 + 2 × 0.0652)
= Exp(5.0764)
= $160.20
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(2.0785 + 0.0016 × 1,824 – 2 × 0.0652)
= Exp(4.8158)
= $123.44
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 77.51% per annum.
- DFS price at the close of July 26, 2024 was inside the secondary price channel.