Stock Price Trends

Alphabet Inc. (GOOGL) 

Alphabet Inc. is an American multinational technology conglomerate holding company headquartered in Mountain View, California. It was created through a restructuring of Google on October 2, 2015, and became the parent company of Google and several former Google subsidiaries.

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 16.62% per annum.
  • GOOGL price at the close of February 16, 2024 was $140.52 and was higher than the top border of the primary price channel by $36.22 (34.73%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 50.72% per annum.
  • GOOGL price at the close of February 16, 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 GOOGL 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 5, 2021
End date: May 9, 2023

a = 5.3387

b = -0.0005

s = 0.1081

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0005) – 1
= -16.62%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.1081) – 1
= 54.10%

April 5, 2021 calculations

Top border of price channel:

Exp(Y535)
= Exp(a + b × X535 + 2 × s)
= Exp(a + b × 776 + 2 × s)
= Exp(5.3387 + -0.0005 × 776 + 2 × 0.1081)
= Exp(5.1685)
= $175.66

Bottom border of price channel:

Exp(Y535)
= Exp(a + b × X535 – 2 × s)
= Exp(a + b × 776 – 2 × s)
= Exp(5.3387 + -0.0005 × 776 – 2 × 0.1081)
= Exp(4.7361)
= $113.99

May 9, 2023 calculations

Top border of price channel:

Exp(Y1,063)
= Exp(a + b × X1,063 + 2 × s)
= Exp(a + b × 1,540 + 2 × s)
= Exp(5.3387 + -0.0005 × 1,540 + 2 × 0.1081)
= Exp(4.7881)
= $120.08

Bottom border of price channel:

Exp(Y1,063)
= Exp(a + b × X1,063 – 2 × s)
= Exp(a + b × 1,540 – 2 × s)
= Exp(5.3387 + -0.0005 × 1,540 – 2 × 0.1081)
= Exp(4.3557)
= $77.92

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 16.62% per annum.
  • GOOGL price at the close of February 16, 2024 was $140.52 and was higher than the top border of the primary price channel by $36.22 (34.73%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: October 26, 2022
End date: February 16, 2024

a = 2.9741

b = 0.0011

s = 0.0566

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0011) – 1
= 50.72%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0566) – 1
= 25.43%

October 26, 2022 calculations

Top border of price channel:

Exp(Y930)
= Exp(a + b × X930 + 2 × s)
= Exp(a + b × 1,345 + 2 × s)
= Exp(2.9741 + 0.0011 × 1,345 + 2 × 0.0566)
= Exp(4.5990)
= $99.39

Bottom border of price channel:

Exp(Y930)
= Exp(a + b × X930 – 2 × s)
= Exp(a + b × 1,345 – 2 × s)
= Exp(2.9741 + 0.0011 × 1,345 – 2 × 0.0566)
= Exp(4.3724)
= $79.24

February 16, 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(2.9741 + 0.0011 × 1,823 + 2 × 0.0566)
= Exp(5.1363)
= $170.08

Bottom border of price channel:

Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,823 – 2 × s)
= Exp(2.9741 + 0.0011 × 1,823 – 2 × 0.0566)
= Exp(4.9097)
= $135.59

Description

  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 50.72% per annum.
  • GOOGL price at the close of February 16, 2024 was inside the secondary price channel.