CCI Indices Technical Analysis and CCI Trading Signals

Developed by Donald Lambert

Commodity Channel Index CCI measures the variation of a commodity price from its statistical mean ( statistical average ).

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

When the CCI is high it displays that stock price is unusually high when it's compared to its average.

When the CCI is low it displays that stock price is unusually low when it's compared to its average.

Indices Technical Analysis and How to Generate Signals

Over-bought/ Oversold Levels

The Commodity Channel Index CCI typically oscillates between ±100.

Indicator values above +100 indicate an overbought conditions & an impending market correction.

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

Buy Trade Signal

If the CCI indicator is oversold, levels below -100, then there is a pending market correction.

The oversold areas will remain intact til Commodity Channel Index indicator starts to move above -100.

When price starts 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 Commodity Channel Index is over bought, levels above +100, then there is a pending market correction.

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

When price starts to move below +100 then that's a interpreted as a sell.

This Commodity Channel sell signal should be combined with a trend line break signal to confirm the sell.

Sell Trade

Divergence Trading

Bullish Stock Divergence Setup

Bullish divergence occurs when price is making new lows while the CCI is failing to surpass its previous low.

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

Bearish Indices Divergence Setup

Bearish Divergence occurs when price is making new highs while the CCI is failing to surpass its previous high.

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

Technical Analysis in Indices Trading

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