CCI Technical Analysis and Commodity Channel Index Signals

Developed 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 indicator which oscillates between high levels and low levels

When the Commodity Channel Index is high it displays that the price is unusually high when compared & analyzed to its average.

When the CCI is low it displays that price is unusually low compared and analyzed to its average.

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The CCI commonly oscillates between ±100.

Indicator values/readings above +100 indicate an overbought conditions and an impending market correction.

Indicator values/readings below -100 indicate an over-sold conditions and an impending market correction

If the Commodities Channel Index indicator is over-sold, levels below -100, then there is a pending market correction.

Over-sold levels will remain intact until Commodity Channel Index indicator starts and begins to move above -100.

When price begins moving above -100 then that's interpreted as buy.

The Commodity Channel buy signal should be combined with a trendline break signal to confirm the buy.

CCI Example Explained - CCI Technical Analysis - Indicator Analysis

Buy Trade

If the CCI is over-bought, levels above +100, then there is a pending market correction.

Overbought levels will remain intact until Commodity Channel Index indicator starts and begins to move below +100.

When price begins 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.

How Do I Place CCI in Chart on Software?

Sell Trade

Bullish divergence forms when price is making/forming new lows while the CCI indicator is failing to move past its previous low.

This is a bullish signal because the divergence setup will be followed by an upwards market correction.

CCI - How to Use Trading CCI in Chart

Bearish Divergence forms when the price is making/forming new highs while the CCI indicator is failing to surpass its previous high.

This is a bearish signal because the divergence setup will be followed by a downward market correction.

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