RE: SP21 Sep 2016 21:49
Indeed, charts don`t reflect sales, or any other specific element of a companies performance in live terms, margin, revenue, profits etc are only known for sure when a company announces results.
What charts do is reflect the value attached to a stock by all the participants in that stock, with all of the known information along with other speculative theories on general market and sector conditions affecting what is perceived to be fair value, or overvalued or undervalued...hence the peaks and troughs within a prevailing trend, up or down or sideways.
Traders (buyers and short sellers) take advantage of these swings within the trend to draw trendlines or observe support and resistance levels or zones, and many other indicators including oscillating indicators like stochastics, or trending indicators like MACD for trading opportunities to `load probability` in their favour. Also taking into consideration things like reading across to other company announcements in same sectors, or interest rate decisions or other external influences etc to help the decision making process short term.
Sales or PE and PEG ratios, how much debt and how capable they are at servicing that debt are for the fundamental analysts and long term investors, who can only make their detailed assessments once they have new information..... a trading update, interim or full results, contract wins or other price sensitive declarations.
Technical analysts assess chart movements on anywhere between 1 minute and 5 year charts or longer, depending on their particular startegy and targets, and all the principles are exactly the same for every timeframe 1 min, 30 mins, 4 hr, 1 day, 1 week etc.
So charts don`t reflect sales...they are far more informative than that because they reflect the psychology and the fear and greed of the participants in that particular markets current value... like a snapshot of optimism or pessimism in whichever timeframe you care to choose.