Southwest Airlines Company (LUV)
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier airline. It is headquartered in Dallas, Texas.
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 25.71% per annum.
- LUV price at the close of July 26, 2024 was $27.23 and was higher than the top border of the primary price channel by $3.42 (14.38%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 18.74% per annum.
- LUV price at the close of July 26, 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 LUV 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: February 8, 2021
End date: June 13, 2023
a = 4.5200
b = -0.0008
s = 0.0677
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.71%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0677) – 1
= 31.11%
February 8, 2021 calculations
Top border of price channel:
Exp(Y386)
= Exp(a + b × X386 + 2 × s)
= Exp(a + b × 560 + 2 × s)
= Exp(4.5200 + -0.0008 × 560 + 2 × 0.0677)
= Exp(4.1993)
= $66.64
Bottom border of price channel:
Exp(Y386)
= Exp(a + b × X386 – 2 × s)
= Exp(a + b × 560 – 2 × s)
= Exp(4.5200 + -0.0008 × 560 – 2 × 0.0677)
= Exp(3.9285)
= $50.83
June 13, 2023 calculations
Top border of price channel:
Exp(Y976)
= Exp(a + b × X976 + 2 × s)
= Exp(a + b × 1,415 + 2 × s)
= Exp(4.5200 + -0.0008 × 1,415 + 2 × 0.0677)
= Exp(3.5031)
= $33.22
Bottom border of price channel:
Exp(Y976)
= Exp(a + b × X976 – 2 × s)
= Exp(a + b × 1,415 – 2 × s)
= Exp(4.5200 + -0.0008 × 1,415 – 2 × 0.0677)
= Exp(3.2322)
= $25.34
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 25.71% per annum.
- LUV price at the close of July 26, 2024 was $27.23 and was higher than the top border of the primary price channel by $3.42 (14.38%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 28, 2021
End date: July 26, 2024
a = 4.2650
b = -0.0006
s = 0.0928
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0006) – 1
= -18.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0928) – 1
= 44.92%
June 28, 2021 calculations
Top border of price channel:
Exp(Y483)
= Exp(a + b × X483 + 2 × s)
= Exp(a + b × 700 + 2 × s)
= Exp(4.2650 + -0.0006 × 700 + 2 × 0.0928)
= Exp(4.0525)
= $57.54
Bottom border of price channel:
Exp(Y483)
= Exp(a + b × X483 – 2 × s)
= Exp(a + b × 700 – 2 × s)
= Exp(4.2650 + -0.0006 × 700 – 2 × 0.0928)
= Exp(3.6815)
= $39.70
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(4.2650 + -0.0006 × 1,824 + 2 × 0.0928)
= Exp(3.4134)
= $30.37
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.2650 + -0.0006 × 1,824 – 2 × 0.0928)
= Exp(3.0424)
= $20.96
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 18.74% per annum.
- LUV price at the close of July 26, 2024 was inside the secondary price channel.