Commodity Channel IndexTechnical Analysis
The Commodity Channel Index (also called CCI) is a banded oscillator that ranges from 100 to -100 and centers around zero. When used in its original design, Long positions are taken in assets over 100. Short positions are taken in assets under -100. The default length setting for the Commodity Channel Index is 20 periods. Lower settings increase the sensitivity and false signals, higher settings reduce sensitivity and false signals.
The alternate use for the Commodity Channel Index is viewing assets as overbought or oversold. In that usage, assets over 100 are overbought. Assets below 100 are oversold.
Divergences are also easily drawn and spotted using the Commodity Channel Index. A bearish divergence is formed by a peak inside the CCI overbought zone, followed by lower successive peaks in the CCI, while price action peaks moves higher. The divergence is completed when price action begins moving lower than prior price action peaks. At that point traders can consider short selling positions in anticipation of a price drop.
A bullish divergence is formed by a trough inside the CCI oversold zone, followed by higher successive troughs in the CCI, while price action troughs continue to form lower than prior troughs. The divergence is completed when price action begins to move above prior price action troughs. Only after that should traders consider getting buying long positions.
Did we help you? Vote with a Crypto-Donation!
Donate Bitcoin Cash
International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
Investment and Finance, Serviced by Amazon
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.