What is the 'Commodity Channel Index - CCI'

An oscillator used in technical analysis to help determine when an investment vehicle has been overbought and oversold. The Commodity Channel Index, first developed by Donald Lambert, quantifies the relationship between the asset's price, a moving average (MA) of the asset's price, and normal deviations (D) from that average. It is computed with the following formula:

Commodity Channel Index (CCI)

BREAKING DOWN 'Commodity Channel Index - CCI'

The CCI has seen substantial growth in popularity amongst technical investors; today's traders often use the indicator to determine cyclical trends in not only commodities, but also equities and currencies.

The CCI, when used in conjunction with other oscillators, can be a valuable tool to identify potential peaks and valleys in the asset's price, and thus provide investors with reasonable evidence to estimate changes in the direction of price movement of the asset.

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RELATED FAQS
  1. Why is it important to track the Commodity Channel Index - CCI?

    Learn more about the commodity channel index, a technical momentum oscillator that traders can use to track overbought and ... Read Answer >>
  2. What are the differences between Relative Strength Index (RSI) & Commodity Channel ...

    Read about some of the primary differences between the relative strength index (RSI) and the commodity channel index (CCI). Read Answer >>
  3. How do investors and traders use the Commodity Channel Index - CCI?

    Learn about some of the most basic trading strategies generated through the commodity channel index, a technical momentum ... Read Answer >>
  4. What are common strategies traders implement when using the Commodity Channel Index ...

    Use the commodity channel index to identify good, low-risk trading opportunities, and look at a variety of CCI technical ... Read Answer >>
  5. How do I use Commodity Channel Index (CCI) when creating a forex trading strategy?

    Learn that forex traders can use the Commodity Channel Index to create a forex trading strategy or as an additional indicator ... Read Answer >>
  6. What is the Dual Commodity Channel Index (DCCI) formula and how is it calculated?

    Learn how to calculate Doug Lambert's commodity channel index (CCI) along with its derivative indicator, the dual commodity ... Read Answer >>
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