Identify Growth With The Sales Line

Identify Growth With The Sales Line

Tracking a stock's quarterly Sales is used to understand the company's total aggregate revenue. Investors study the company's quarterly financial reports to identify growth or decline, gauge momentum, and identify any positive catalysts.

To simplify digging into reports with fundamental jargon, the Sales Line is plotted on your weekly charts as one easy-to-follow data point.

What Is A Sales Line?

Sales refer to a company's total revenue. Every quarter, companies announce financial reports that include their total profit before expenses.

The Sales Line represents the change in sales compared to the previous quarter and can be represented as a dollar value or a quarter-over-quarter percentage.

The Sales Line is a quick visual representation that helps investors who rely on technical analysis to confirm that a company is continuously growing and can scale its business.

Why Use Sales Lines?

For position and intermediate-term swing traders, the Sales Line will help keep your focus on stocks that are expected to grow as it increases its total sales quarterly.

💡 Pro Tip: Top-performing stocks have at least a 25% increase in Sales quarter-over-quarter

Closely monitor stocks that report triple-digit Sales.

Higher Sales signifies a company increasing revenue and positioned for growth. Investors will tend to increase their positions and buy shares as the stock continues increasing its Sales.

When browsing hundreds of stocks, you want to determine the trend quickly. Just like monitoring strong price action, you should also consider financial growth.

A rising Sales Line indicates the stock is increasing its revenue over time

A falling Sales Line indicates the stock's revenue is decreasing over time

The Sales Line is plotted as a line on the same price chart to view the stock's total revenue quickly.

Correlations With Price

By analyzing the Sales line, you can quickly understand a company's financial performance.

A stock with a constantly rising sales line shows that the company continuously increases its revenue. This growth indicates that the company has the potential to become more profitable.

Keep stocks on your focus list when you see a rising Sales Line. Institutions that take months to accumulate shares of stock want to ensure the company is showing long-term growth and will continue to invest as the company continues to show increasing sales.

When the sales line declines and the price moves sideways, look for sales to grow and support positive price action. As the company starts to increase its revenue, you should start to see the stock's price rise.

Pay close attention to companies that report their first quarterly report with positive sales,, as institutions generally focus on stocks making money. Positive sales will impact the company's Earnings Per Share and increase the value of a stock.

Weekly Charts In Deepvue

As fundamental data is reported quarterly, the Sales Line indicator is best seen on weekly charts.

Type “Sales” in the indicator search to see Deepvue's Sales Line on your weekly charts.

Identify Growth With The Sales Line

You will see an orange line corresponding to the stock's quarterly Sales and a new y-axis displaying the Sales value. Just like any indicator, you can change the color and style.

Depending on your trading style, you can plot data as a dollar value or a percentage.

Identify Growth With The Sales Line

Change the Type to a dollar or percentage value in the Inputs Setting.

Examples

Look at how quickly you can determine growth by visualizing quarterly Sales as a line on your charts.

Symbol: ELF
Company:
e.l.f Beauty
Year: 2022-2023

Identify Growth With The Sales Line

An upturn in sales growth(%) helped push ELF to all-time highs. When the historic 700% move was underway, ELF reported the highest sales growth percentage ever, propelling the stock even higher.

Symbol: COIN
Company:
Coinbase
Year: 2022

Identify Growth With The Sales Line

After COIN bottomed and made a higher low, the trailing twelve-month sales line($) turned up. COIN finally broke out of its Stage 1 Base when the sales line became positive quarter-over-quarter

Symbol: META
Company:
Meta Platforms
Year: 2021-2022

Identify Growth With The Sales Line

META sales began to decline at the peak of the 2020-2021 bull market. Investors who identified this downturn would have seen red flags before the stock formed a long-term top.

Forward Estimates

When analyzing the Sales Line also consider the future outlook by monitoring Forward estimates.

Identify Growth With The Sales Line

This provides a visual for displaying analysts' Sales forecasts. When screening charts, note the direction of the Sales estimates to build conviction about a stock's growth.

Symbol: CRWD
Company:
CrowdStrike Holdings
Year: 2024

Identify Growth With The Sales Line

Viewing the Sales Line($) with estimates gives traders a visual clue to help evaluate future growth potential. CRWD's future sales estimates are pointing higher as it forms a base near all-time highs.

Trailing Twelve Month

You can change the settings to calculate the Trailing Twelve Months (TTM) to smooth out the sales line.

Like a moving average, the TTM averages sales growth for the past twelve months (four quarters).

Identify Growth With The Sales Line

The TTM Sales Line represents the average quarterly Sales over the previous twelve months.

Selecting this option will provide a broader view by smoothing out seasonal fluctuations. This will help you focus on quarterly outperformance as the current sales report is compared to the average performance over the past year.

Putting It Together

Adding the Sales Line to your weekly charts provides a quick and easy way to monitor a company's financial health based on quarterly revenue.

You can visually identify companies with consistent sales growth by tracking the Sales line.

Look for stocks with a rising Sales Line indicating the potential for future growth.

As with any indicator, the Sales Lines should only be used to help build conviction around a trade.

Incorporate the Sales Line on your weekly charts to strengthen your conviction in the stock's price movement.

Similar Posts