First American Corporation (FAF)
First American Financial Corporation, provides financial services. The company is headquartered in Santa Ana, California.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 41.19% per annum.
- FAF price at the close of May 17, 2024 was $57.53 and was lower than the bottom border of the primary price channel by $93.61 (61.94%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 3.50% per annum.
- FAF price at the close of May 17, 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 FAF 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 22, 2021
End date: January 19, 2022
a = 3.3563
b = 0.0009
s = 0.0309
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0009) – 1
= 41.19%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0309) – 1
= 13.14%
April 22, 2021 calculations
Top border of price channel:
Exp(Y485)
= Exp(a + b × X485 + 2 × s)
= Exp(a + b × 703 + 2 × s)
= Exp(3.3563 + 0.0009 × 703 + 2 × 0.0309)
= Exp(4.0824)
= $59.29
Bottom border of price channel:
Exp(Y485)
= Exp(a + b × X485 – 2 × s)
= Exp(a + b × 703 – 2 × s)
= Exp(3.3563 + 0.0009 × 703 – 2 × 0.0309)
= Exp(3.9589)
= $52.40
January 19, 2022 calculations
Top border of price channel:
Exp(Y673)
= Exp(a + b × X673 + 2 × s)
= Exp(a + b × 975 + 2 × s)
= Exp(3.3563 + 0.0009 × 975 + 2 × 0.0309)
= Exp(4.3394)
= $76.66
Bottom border of price channel:
Exp(Y673)
= Exp(a + b × X673 – 2 × s)
= Exp(a + b × 975 – 2 × s)
= Exp(3.3563 + 0.0009 × 975 – 2 × 0.0309)
= Exp(4.2159)
= $67.76
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 41.19% per annum.
- FAF price at the close of May 17, 2024 was $57.53 and was lower than the bottom border of the primary price channel by $93.61 (61.94%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: April 22, 2021
End date: May 17, 2024
a = 4.1677
b = -0.0001
s = 0.1030
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.50%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1030) – 1
= 50.97%
April 22, 2021 calculations
Top border of price channel:
Exp(Y485)
= Exp(a + b × X485 + 2 × s)
= Exp(a + b × 703 + 2 × s)
= Exp(4.1677 + -0.0001 × 703 + 2 × 0.1030)
= Exp(4.3051)
= $74.08
Bottom border of price channel:
Exp(Y485)
= Exp(a + b × X485 – 2 × s)
= Exp(a + b × 703 – 2 × s)
= Exp(4.1677 + -0.0001 × 703 – 2 × 0.1030)
= Exp(3.8932)
= $49.07
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.1677 + -0.0001 × 1,824 + 2 × 0.1030)
= Exp(4.1958)
= $66.41
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.1677 + -0.0001 × 1,824 – 2 × 0.1030)
= Exp(3.7839)
= $43.99
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 3.50% per annum.
- FAF price at the close of May 17, 2024 was inside the secondary price channel.