Definition
CCI measures how far price has moved from its average price relative to the average deviation. Originally designed for commodities, it works on any security. Readings above +100 suggest overbought; below -100 suggest oversold. Also used for trend identification.
Formula
CCI = (Typical Price - SMA of TP) / (0.015 × Mean Deviation)
Example
A CCI reading of +150 indicates price is significantly above its average, potentially overbought. A reading of -200 suggests extreme oversold conditions.
FAQ
What is Commodity Channel Index (CCI)?
An oscillator measuring price deviation from its statistical mean.
How do you calculate Commodity Channel Index (CCI)?
A common formula for Commodity Channel Index (CCI) is: CCI = (Typical Price - SMA of TP) / (0.015 × Mean Deviation)
Why is Commodity Channel Index (CCI) important?
Commodity Channel Index (CCI) helps investors evaluate technical analysis and make more informed decisions.