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Commodity Channel Index
(redirected from Commodity Channel Indicator)

   Also found in: Wikipedia 0.03 sec.
Commodity Channel Index
An index used in technical analysis. High values mean a potential future correction (downward movement in underlying asset) and low values potentially forecast a rally. Details in Donald Lambert's October 1980 article in Commodities Magazine.

Commodity Channel Index
In technical analysis, an equation using a moving average to determine whether a commodity is overbought or oversold. It is calculated as follows:

CCI = (P - MA) / 0.015D

where:

P = the commodity's current price.
MA = a moving average of the price over a given period of time.
D = normal deviations from the moving average.

This has become a popular tool among technical analysts, who use it to find highs and lows in a commodity's price to make their investment decisions. Some even use it for equities and currencies, in addition to commodities.


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