Business, Legal & Accounting Glossary
The Commodity Channel Index (CCI), first introduced by Donald Lambert, is an oscillator used to help determine when a stock has been overbought and oversold. The Commodity Channel Index usually trends between +/-100.
The CCI measures the variances in the price of a given equity compared to the average price of the same equity.
A divergence occurs when the stock price reaches a new high but the Commodity Channel Index does not (reach a new high). The CCI is considered to be in an overbought state when it is above 100 and an oversold state when it is below -100. Buy signals can, therefore, be issued when the CCI rises above the -100 line and sell signals when the CCI drops below the +100 line.
CCI
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Commodity Channel Index are sourced/syndicated and enhanced from:
This glossary post was last updated: 25th March, 2020 | 0 Views.