Stock Price Trends

Electronic Arts Inc (EA)

Electronic Arts Inc. (EA) is an American video game company headquartered in Redwood City, California. It is the second-largest gaming company in the Americas and Europe by revenue and market capitalization after Activision Blizzard and ahead of Take-Two Interactive, and Ubisoft as of May 2020.

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 3.21% per annum.
  • EA price at the close of July 25, 2024 was $141.80 and was higher than the top border of the primary price channel by $8.99 (6.77%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 8.48% per annum.
  • EA price at the close of July 25, 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 EA 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: June 17, 2020
End date: November 6, 2023

a = 4.9413

b = -0.0001

s = 0.0555

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.21%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0555) – 1
= 24.85%

June 17, 2020 calculations

Top border of price channel:

Exp(Y225)
= Exp(a + b × X225 + 2 × s)
= Exp(a + b × 327 + 2 × s)
= Exp(4.9413 + -0.0001 × 327 + 2 × 0.0555)
= Exp(5.0230)
= $151.86

Bottom border of price channel:

Exp(Y225)
= Exp(a + b × X225 – 2 × s)
= Exp(a + b × 327 – 2 × s)
= Exp(4.9413 + -0.0001 × 327 – 2 × 0.0555)
= Exp(4.8010)
= $121.64

November 6, 2023 calculations

Top border of price channel:

Exp(Y1,078)
= Exp(a + b × X1,078 + 2 × s)
= Exp(a + b × 1,564 + 2 × s)
= Exp(4.9413 + -0.0001 × 1,564 + 2 × 0.0555)
= Exp(4.9123)
= $135.95

Bottom border of price channel:

Exp(Y1,078)
= Exp(a + b × X1,078 – 2 × s)
= Exp(a + b × 1,564 – 2 × s)
= Exp(4.9413 + -0.0001 × 1,564 – 2 × 0.0555)
= Exp(4.6904)
= $108.89

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 3.21% per annum.
  • EA price at the close of July 25, 2024 was $141.80 and was higher than the top border of the primary price channel by $8.99 (6.77%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: September 15, 2022
End date: July 25, 2024

a = 4.5166

b = 0.0002

s = 0.0497

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 8.48%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0497) – 1
= 21.98%

September 15, 2022 calculations

Top border of price channel:

Exp(Y791)
= Exp(a + b × X791 + 2 × s)
= Exp(a + b × 1,147 + 2 × s)
= Exp(4.5166 + 0.0002 × 1,147 + 2 × 0.0497)
= Exp(4.8716)
= $130.52

Bottom border of price channel:

Exp(Y791)
= Exp(a + b × X791 – 2 × s)
= Exp(a + b × 1,147 – 2 × s)
= Exp(4.5166 + 0.0002 × 1,147 – 2 × 0.0497)
= Exp(4.6729)
= $107.01

July 25, 2024 calculations

Top border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(4.5166 + 0.0002 × 1,826 + 2 × 0.0497)
= Exp(5.0229)
= $151.85

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.5166 + 0.0002 × 1,826 – 2 × 0.0497)
= Exp(4.8243)
= $124.49

Description

  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 8.48% per annum.
  • EA price at the close of July 25, 2024 was inside the secondary price channel.

See Also