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 26.00% per annum.
- LUV price at the close of May 8, 2024 was $27.18 and was higher than the top border of the primary price channel by $1.88 (7.43%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 19.72% per annum.
- LUV price at the close of May 8, 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 16, 2021
End date: June 12, 2023
a = 4.6050
b = -0.0008
s = 0.0663
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -26.00%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0663) – 1
= 30.35%
February 16, 2021 calculations
Top border of price channel:
Exp(Y446)
= Exp(a + b × X446 + 2 × s)
= Exp(a + b × 649 + 2 × s)
= Exp(4.6050 + -0.0008 × 649 + 2 × 0.0663)
= Exp(4.2020)
= $66.82
Bottom border of price channel:
Exp(Y446)
= Exp(a + b × X446 – 2 × s)
= Exp(a + b × 649 – 2 × s)
= Exp(4.6050 + -0.0008 × 649 – 2 × 0.0663)
= Exp(3.9369)
= $51.26
June 12, 2023 calculations
Top border of price channel:
Exp(Y1,030)
= Exp(a + b × X1,030 + 2 × s)
= Exp(a + b × 1,495 + 2 × s)
= Exp(4.6050 + -0.0008 × 1,495 + 2 × 0.0663)
= Exp(3.5040)
= $33.25
Bottom border of price channel:
Exp(Y1,030)
= Exp(a + b × X1,030 – 2 × s)
= Exp(a + b × 1,495 – 2 × s)
= Exp(4.6050 + -0.0008 × 1,495 – 2 × 0.0663)
= Exp(3.2389)
= $25.51
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 26.00% per annum.
- LUV price at the close of May 8, 2024 was $27.18 and was higher than the top border of the primary price channel by $1.88 (7.43%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 28, 2021
End date: May 8, 2024
a = 4.3553
b = -0.0006
s = 0.0930
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0006) – 1
= -19.72%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0930) – 1
= 45.09%
June 28, 2021 calculations
Top border of price channel:
Exp(Y538)
= Exp(a + b × X538 + 2 × s)
= Exp(a + b × 781 + 2 × s)
= Exp(4.3553 + -0.0006 × 781 + 2 × 0.0930)
= Exp(4.0714)
= $58.64
Bottom border of price channel:
Exp(Y538)
= Exp(a + b × X538 – 2 × s)
= Exp(a + b × 781 – 2 × s)
= Exp(4.3553 + -0.0006 × 781 – 2 × 0.0930)
= Exp(3.6992)
= $40.41
May 8, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(4.3553 + -0.0006 × 1,826 + 2 × 0.0930)
= Exp(3.4425)
= $31.27
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.3553 + -0.0006 × 1,826 – 2 × 0.0930)
= Exp(3.0703)
= $21.55
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 19.72% per annum.
- LUV price at the close of May 8, 2024 was inside the secondary price channel.