| The Commodity Channel Index (CCI) helps identify cyclical financial market trends. It was developed by Donald Lambert in 1980 and is designed to measure the difference between the current price and its historical average in relation to market volatility. The CCI value oscillates above and below a zero line, with high positive values indicating that the current price is above its historical average and high negative values indicating that the current price is below its historical average. The CCI often identifies potential buy or sell signals based on overbought and oversold conditions. Readings above 100 are considered overbought, and readings below -100 are oversold. Traders may look for potential buy signals when the CCI crosses above -100 from oversold conditions or sell signals when it crosses below 100 from overbought conditions. |
Commodity Channel Index (CCI) - Technical Analysis from A to Z