Commodity Channel Index, CCI - CCI Technical Analysis & Commodity Channel Index Signals

Developed & Created by Donald Lambert

The Commodity Channel Index, CCI measures the variation of a commodity price from its statistic mean/statistical average.

This indicator is an oscillator indicator which oscillates between high levels & low levels

When CCI is high it portrays that price is unusually high compared and analyzed to the the average.

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

Technical Analysis and How to Generate Signals

Over-bought/ Oversold Levels

The CCI commonly oscillates between ±100.

Indicator values/readings above +100 indicate an over-bought conditions & an impending market correction.

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

Buy Signal

If the CCI indicator is over-sold, areas below -100, then there is a pending market correction.

The oversold areas will remain intact until CCI trading 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 trend line break signal to confirm the buy.

Buy Trade

Sell Trade Signal

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

Over bought levels will remain intact until CCI indicator starts to move below +100.

When price begins and starts moving below +100 then that's a interpreted as sell.

This Commodity Channel sell trading signal should be combined together with a trendline break signal to confirm the sell.

Sell Trade

Divergence Trading

Bullish Trade Divergence Trading Setup

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

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

Bearish Divergence Trade Setup

Bearish Divergence occurs when the price is forming/making new highs while the Commodities Channel Index indicator is failing to surpass its previous high.

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

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