Plotting Share-Adjusted Market Capitalization Levels on a Price Chart
Summary
This charting indicator converts selected market capitalization levels into corresponding share prices. The user supplies shares outstanding in millions; the script multiplies that figure by the current price to estimate market capitalization, chooses a spacing based on the company's size, and draws horizontal price lines with labels showing the associated capitalization levels.
The spacing becomes coarser for larger companies and finer for smaller ones, allowing the chart to display a set of comparable capitalization reference points despite differences in share count. This is a visualization aid rather than a trading signal or valuation model. Its usefulness depends on entering an accurate, consistently scaled share count, and the supplied rules do not describe how to account for changes in shares outstanding, multiple share classes, or other corporate actions.
Key ideas
- The indicator maps market capitalization targets to price levels using shares outstanding.
- Users must provide shares outstanding in millions for the conversion.
- Line spacing varies with estimated company size, with finer levels for smaller firms.
- The output is a chart reference and does not itself establish fair value or a trade signal.
- Changes in share count and share class treatment are not addressed.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.