CCI Indices Technical Analysis & CCI Trading Signals

Developed by Donald Lambert

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

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

When the CCI is high it shows that stock indices price is unusually high when it is compared to its average.

When the CCI is low it shows that stock indices price is unusually low when it is compared to its average.

Commodity Channel Index, CCI Stock Index Indicator Analysis

Indices Technical Analysis and How to Generate Trading Signals

The 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 & an impending market correction

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

The over-sold areas will remain intact until Commodity Channel Index indicator starts to move above -100.

When stock indices trading price starts moving above -100 then that is interpreted as a buy.

The Commodity Channel buy stock indices trading signal should be combined with a trend-line break signal to confirm the buy.

CCI Technical Indicator Analysis - CCI Indices Indicator Technical Analysis

Buy Trade

If the Commodity Channel Index is over bought, levels above +100, then there's a pending market correction.

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

When stock indices trading price starts moving below +100 then that is a interpreted as sell.

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

Commodity Channel Indices, CCI Index Indicator Analysis

Sell Trade

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

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

Commodity Channel Index, CCI Stock Index Indicator Analysis - CCI Indices Indicator Analysis

Bearish Divergence occurs when stock indices trading 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.

Bearish Divergence Signal - CCI Index Indicator Analysis

Technical Analysis in Stock Indices Trading