📈 Indicators·intermediate

CCI (Commodity Channel Index)

Also called: commodity channel index

A momentum oscillator that measures how far price has deviated from its average — used to identify overbought and oversold extremes.

CCI was designed for commodity markets (hence the name) but works on every asset class. It measures the deviation of price from its statistical average, scaled to oscillate roughly between -200 and +200. Readings above +100 = overbought. Readings below -100 = oversold. Extremes (above +200 or below -200) usually mean a reversal is near. CCI is most useful for finding extreme conditions in trending markets and divergences in ranging markets. In a strong uptrend, CCI staying above +100 confirms momentum. In a range, CCI hitting +200 with a bearish divergence is a strong fade signal. The default 20-period setting works for most timeframes. Shorter periods make it more responsive but noisier. Longer periods smooth it out but lag.

Real trade example

Silver (XAGUSD) printed a daily CCI reading of +260 with a bearish divergence at $32 in October 2024. The reversal delivered a 12% drop over the following six weeks.

Related terms

RSI (Relative Strength Index)

intermediate

A momentum indicator from 0-100 that flags overbought (>70) and oversold (<30) conditions — and, more importantly, divergences.

Stochastic Oscillator

intermediate

A momentum indicator that compares the current close to its recent high-low range — used to spot overbought and oversold conditions.

Williams %R

intermediate

A momentum oscillator similar to stochastics that measures overbought and oversold conditions on an inverted scale (-100 to 0).

Divergence

intermediate

When price moves in one direction but a momentum indicator moves in the opposite direction — a warning of trend exhaustion.

VWAP (Volume-Weighted Average Price)

advanced

An intraday indicator that shows the average price an asset has traded at, weighted by volume — used as a benchmark and dynamic support/resistance.

Keltner Channel

advanced

A volatility-based envelope around a moving average using ATR — similar to Bollinger Bands but smoother.

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