Stock Price Trends

RH, is a home furnishings retailer. The company is headquartered in Corte Madera, California.

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 98.79% per annum.
  • RH price at the close of April 28, 2025 was $183.53 and was higher than the top border of the primary price channel by $1.71 (0.94%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 890.78% per annum.
  • RH price at the close of April 28, 2025 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 RH 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: January 15, 2025
End date: April 23, 2025

a = 27.0486

b = -0.0121

s = 0.1085

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0121) – 1
= -98.79%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.1085) – 1
= 54.33%

January 15, 2025 calculations

Top border of price channel:

Exp(Y1,185)
= Exp(a + b × X1,185 + 2 × s)
= Exp(a + b × 1,722 + 2 × s)
= Exp(27.0486 + -0.0121 × 1,722 + 2 × 0.1085)
= Exp(6.4482)
= $631.56

Bottom border of price channel:

Exp(Y1,185)
= Exp(a + b × X1,185 – 2 × s)
= Exp(a + b × 1,722 – 2 × s)
= Exp(27.0486 + -0.0121 × 1,722 – 2 × 0.1085)
= Exp(6.0142)
= $409.22

April 23, 2025 calculations

Top border of price channel:

Exp(Y1,252)
= Exp(a + b × X1,252 + 2 × s)
= Exp(a + b × 1,820 + 2 × s)
= Exp(27.0486 + -0.0121 × 1,820 + 2 × 0.1085)
= Exp(5.2635)
= $193.15

Bottom border of price channel:

Exp(Y1,252)
= Exp(a + b × X1,252 – 2 × s)
= Exp(a + b × 1,820 – 2 × s)
= Exp(27.0486 + -0.0121 × 1,820 – 2 × 0.1085)
= Exp(4.8295)
= $125.15

Description

  • The primary trend is decreasing.
  • The decline rate of the primary trend is 98.79% per annum.
  • RH price at the close of April 28, 2025 was $183.53 and was higher than the top border of the primary price channel by $1.71 (0.94%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: April 3, 2025
End date: April 28, 2025

a = -6.2733

b = 0.0063

s = 0.0703

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0063) – 1
= 890.78%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0703) – 1
= 32.46%

April 3, 2025 calculations

Top border of price channel:

Exp(Y1,239)
= Exp(a + b × X1,239 + 2 × s)
= Exp(a + b × 1,800 + 2 × s)
= Exp(-6.2733 + 0.0063 × 1,800 + 2 × 0.0703)
= Exp(5.1768)
= $177.11

Bottom border of price channel:

Exp(Y1,239)
= Exp(a + b × X1,239 – 2 × s)
= Exp(a + b × 1,800 – 2 × s)
= Exp(-6.2733 + 0.0063 × 1,800 – 2 × 0.0703)
= Exp(4.8956)
= $133.71

April 28, 2025 calculations

Top border of price channel:

Exp(Y1,255)
= Exp(a + b × X1,255 + 2 × s)
= Exp(a + b × 1,825 + 2 × s)
= Exp(-6.2733 + 0.0063 × 1,825 + 2 × 0.0703)
= Exp(5.3338)
= $207.23

Bottom border of price channel:

Exp(Y1,255)
= Exp(a + b × X1,255 – 2 × s)
= Exp(a + b × 1,825 – 2 × s)
= Exp(-6.2733 + 0.0063 × 1,825 – 2 × 0.0703)
= Exp(5.0527)
= $156.45

Description

  • The secondary trend is increasing.
  • The growth rate of the secondary trend is 890.78% per annum.
  • RH price at the close of April 28, 2025 was inside the secondary price channel.

See Also

Symbol

Company name

WSM
Williams-Sonoma Inc