Identifying supply and demand area with smoothing splines for Unilever Indonesian company stock prices

Stock is a tradeable instrument on the stock exchange. Stock price movement is controlled by demand and supply. Demand and supply area is an area constructed by some corporate or foreign investor to accumulate and distribute stock price. They usually on purpose to discover a significant price movement by construction this area and an investor can use this as signal to buy or sell stock. They can take profit-taking optimally by technical analysis. Technical analysis is an approach to investment using historical stock data to forecast future price in T time period. Historical stock price is visualized as a candlestick and it can be predicted by mathematical functions such as moving average and stochastic. However, those method are not significant enough to identify demand and supply area. In this research, we investigate Unilever Indonesia Tbk. (UNVR) dataset to discover a supply and demand area with smoothing spline. Technically, smoothing spline can interpolate an unknown function by controlling certain value. For the dataset, we use historical price on UNVR for 312 days. Based on this research, we obtain a demand area on UNVR in the range of 3450-3720 because of repeating interpolation value over 22 days (March 18 2022 – April 19 2022).