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 26.19% per annum.
  • MCD price at the close of July 25, 2024 was $251.46 and was inside the primary price channel.
  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 3.85% per annum.
  • MCD price at the close of July 25, 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: December 26, 2023
End date: July 25, 2024

a = 7.0407

b = -0.0008

s = 0.0203

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -26.19%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0203) – 1
= 8.47%

December 26, 2023 calculations

Top border of price channel:

Exp(Y1,112)
= Exp(a + b × X1,112 + 2 × s)
= Exp(a + b × 1,614 + 2 × s)
= Exp(7.0407 + -0.0008 × 1,614 + 2 × 0.0203)
= Exp(5.7387)
= $310.65

Bottom border of price channel:

Exp(Y1,112)
= Exp(a + b × X1,112 – 2 × s)
= Exp(a + b × 1,614 – 2 × s)
= Exp(7.0407 + -0.0008 × 1,614 – 2 × 0.0203)
= Exp(5.6574)
= $286.39

July 25, 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(7.0407 + -0.0008 × 1,826 + 2 × 0.0203)
= Exp(5.5623)
= $260.42

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(7.0407 + -0.0008 × 1,826 – 2 × 0.0203)
= Exp(5.4810)
= $240.08

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 26.19% per annum.
  • MCD price at the close of July 25, 2024 was $251.46 and was inside the primary price channel.

Secondary Trend

Start date: May 23, 2024
End date: July 25, 2024

a = 5.7329

b = -0.0001

s = 0.0163

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -3.85%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0163) – 1
= 6.74%

May 23, 2024 calculations

Top border of price channel:

Exp(Y1,215)
= Exp(a + b × X1,215 + 2 × s)
= Exp(a + b × 1,763 + 2 × s)
= Exp(5.7329 + -0.0001 × 1,763 + 2 × 0.0163)
= Exp(5.5761)
= $264.03

Bottom border of price channel:

Exp(Y1,215)
= Exp(a + b × X1,215 – 2 × s)
= Exp(a + b × 1,763 – 2 × s)
= Exp(5.7329 + -0.0001 × 1,763 – 2 × 0.0163)
= Exp(5.5108)
= $247.35

July 25, 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(5.7329 + -0.0001 × 1,826 + 2 × 0.0163)
= Exp(5.5693)
= $262.25

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.7329 + -0.0001 × 1,826 – 2 × 0.0163)
= Exp(5.5041)
= $245.69

Description

  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 3.85% per annum.
  • MCD price at the close of July 25, 2024 was inside the secondary price channel.