How to Draw a Trend Line of Home Depot Revenues
Home Depot is a leading building supplies store. If you're thinking about buying Home Depot stock, you can research the stock trend for your prospect in a few ways. There are two schools of thought in the world of investment analysis. They are fundamental and technical. Fundamental analysis looks for value within operations and the business model, whereas technical analysis looks for trends in historical price and volume levels to provide clues about where the stock will be in the future. One popular tool used by technical analysts is the trend line. The trend line can help you to identify the stock trend for Home Depot.
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Instructions
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Obtain graph paper and a pencil. These are the best tools for drawing stock charts.
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Obtain the revenue history for Home Depot. You can find this on the income statement that is in the company's annual report. The most recent annual report is always available on the company's Investor Relations site. Most income statements have two to three years of data. Obtain at least three consecutive annual reports. You may need to contact Home Depot's Investor Relations department for archived annual reports.
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Draw a horizontal axis (x) and a perpendicular vertical line (y) that cuts the horizontal line in half. Label the x axis "Years" and the y axis "Revenue" in dollars. Choose a scale that best fits the size of Home Depot's revenues.
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Draw a point for each date where the date and revenue price point meet. Then connect the points from year to year.
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Determine the direction of the revenue trend. Now draw a straight line that follows the trend of the dots to come up with your trend line. There are only three directions for a line to trend: up, down or sideways.
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