CCI Technical Analysis and Commodity Channel Index Signals
Created by Donald Lambert
The Commodity Channel Index measures the variation of a commodity price from its statistical mean(statistical average).
This indicator is an oscillator which oscillates between high levels and low levels
When the Commodity Channel Index is high it highlights that price is unusually high when compared to its average.
When the CCI is low it highlights that price is unusually low compared to its average.
Gold Technical Analysis & Generating Signals
Overbought/ Oversold Levels
The CCI typically oscillates between ±100.
Indicator values above +100 indicate an overbought conditions and an impending market correction.
Indicator values below -100 indicate an oversold conditions & an impending market correction
Buy Signal
If the Commodities Channel Index indicator is oversold, levels below -100, then there's a pending market correction.
Oversold levels will remain intact until Commodity Channel Index indicator starts to move above -100.
When price starts moving above -100 then that is interpreted as a buy.
The Commodity Channel buy signal should be combined with a trendline break signal to confirm the buy.
Buy Trade
Sell Signal
If the Commodity Channel Index is overbought, levels above +100, then there's a pending market correction.
Overbought areas will remain intact until CCI indicator starts to move below +100.
When price starts moving below +100 then that's a interpreted as sell.
This Commodity Channel sell signal should be combined with a trendline break signal to confirm the sell.
Sell Trade
Divergence XAUUSD
Bullish Divergence Setup
Bullish divergence forms when price is making new lows while the CCI technical indicator is failing to surpass its previous low.
This is a bullish signal because the divergence will be followed by an upward market correction.
Bearish Divergence Setup
Bearish Divergence forms when the price is making new highs while the CCI indicator is failing to surpass its previous high.
This is a bearish signal because the divergence will be followed by a down-wards market correction.
Technical Analysis in Gold
