Stock Price Trends

McDonald’s Corporation (MCD)

McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand, and later turned the company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona.

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 53.26% per annum.
  • MCD price at the close of April 16, 2024 was $265.43 and was inside the primary price channel.
  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 63.30% per annum.
  • MCD price at the close of April 16, 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 MCD 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 22, 2024
End date: April 16, 2024

a = 9.3906

b = -0.0021

s = 0.0120

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0021) – 1
= -53.26%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0120) – 1
= 4.92%

February 22, 2024 calculations

Top border of price channel:

Exp(Y1,220)
= Exp(a + b × X1,220 + 2 × s)
= Exp(a + b × 1,772 + 2 × s)
= Exp(9.3906 + -0.0021 × 1,772 + 2 × 0.0120)
= Exp(5.7218)
= $305.46

Bottom border of price channel:

Exp(Y1,220)
= Exp(a + b × X1,220 – 2 × s)
= Exp(a + b × 1,772 – 2 × s)
= Exp(9.3906 + -0.0021 × 1,772 – 2 × 0.0120)
= Exp(5.6738)
= $291.14

April 16, 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(9.3906 + -0.0021 × 1,826 + 2 × 0.0120)
= Exp(5.6093)
= $272.95

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(9.3906 + -0.0021 × 1,826 – 2 × 0.0120)
= Exp(5.5613)
= $260.16

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 53.26% per annum.
  • MCD price at the close of April 16, 2024 was $265.43 and was inside the primary price channel.

Secondary Trend

Start date: March 20, 2024
End date: April 16, 2024

a = 10.5929

b = -0.0027

s = 0.0094

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0027) – 1
= -63.30%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0094) – 1
= 3.84%

March 20, 2024 calculations

Top border of price channel:

Exp(Y1,239)
= Exp(a + b × X1,239 + 2 × s)
= Exp(a + b × 1,799 + 2 × s)
= Exp(10.5929 + -0.0027 × 1,799 + 2 × 0.0094)
= Exp(5.6707)
= $290.22

Bottom border of price channel:

Exp(Y1,239)
= Exp(a + b × X1,239 – 2 × s)
= Exp(a + b × 1,799 – 2 × s)
= Exp(10.5929 + -0.0027 × 1,799 – 2 × 0.0094)
= Exp(5.6329)
= $279.48

April 16, 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(10.5929 + -0.0027 × 1,826 + 2 × 0.0094)
= Exp(5.5965)
= $269.48

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(10.5929 + -0.0027 × 1,826 – 2 × 0.0094)
= Exp(5.5588)
= $259.50

Description

  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 63.30% per annum.
  • MCD price at the close of April 16, 2024 was inside the secondary price channel.