Stock Price Trends

Microchip Technology Inc (MCHP)

Microchip Technology Inc. is a publicly-listed American corporation that manufactures microcontroller, mixed-signal, analog and Flash-IP integrated circuits.

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 4.20% per annum.
  • MCHP price at the close of July 26, 2024 was $86.83 and was higher than the top border of the primary price channel by $13.30 (18.08%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 20.49% per annum.
  • MCHP price at the close of July 26, 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 MCHP 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: November 20, 2020
End date: January 20, 2023

a = 4.3389

b = -0.0001

s = 0.0865

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0001) – 1
= -4.20%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0865) – 1
= 41.34%

November 20, 2020 calculations

Top border of price channel:

Exp(Y334)
= Exp(a + b × X334 + 2 × s)
= Exp(a + b × 480 + 2 × s)
= Exp(4.3389 + -0.0001 × 480 + 2 × 0.0865)
= Exp(4.4556)
= $86.10

Bottom border of price channel:

Exp(Y334)
= Exp(a + b × X334 – 2 × s)
= Exp(a + b × 480 – 2 × s)
= Exp(4.3389 + -0.0001 × 480 – 2 × 0.0865)
= Exp(4.1096)
= $60.92

January 20, 2023 calculations

Top border of price channel:

Exp(Y877)
= Exp(a + b × X877 + 2 × s)
= Exp(a + b × 1,271 + 2 × s)
= Exp(4.3389 + -0.0001 × 1,271 + 2 × 0.0865)
= Exp(4.3627)
= $78.47

Bottom border of price channel:

Exp(Y877)
= Exp(a + b × X877 – 2 × s)
= Exp(a + b × 1,271 – 2 × s)
= Exp(4.3389 + -0.0001 × 1,271 – 2 × 0.0865)
= Exp(4.0167)
= $55.52

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 4.20% per annum.
  • MCHP price at the close of July 26, 2024 was $86.83 and was higher than the top border of the primary price channel by $13.30 (18.08%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: April 5, 2022
End date: July 26, 2024

a = 3.6160

b = 0.0005

s = 0.0708

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0005) – 1
= 20.49%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0708) – 1
= 32.74%

April 5, 2022 calculations

Top border of price channel:

Exp(Y678)
= Exp(a + b × X678 + 2 × s)
= Exp(a + b × 981 + 2 × s)
= Exp(3.6160 + 0.0005 × 981 + 2 × 0.0708)
= Exp(4.2586)
= $70.71

Bottom border of price channel:

Exp(Y678)
= Exp(a + b × X678 – 2 × s)
= Exp(a + b × 981 – 2 × s)
= Exp(3.6160 + 0.0005 × 981 – 2 × 0.0708)
= Exp(3.9754)
= $53.27

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(3.6160 + 0.0005 × 1,824 + 2 × 0.0708)
= Exp(4.6891)
= $108.76

Bottom border of price channel:

Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(3.6160 + 0.0005 × 1,824 – 2 × 0.0708)
= Exp(4.4059)
= $81.93

Description

  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 20.49% per annum.
  • MCHP price at the close of July 26, 2024 was inside the secondary price channel.