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Commodity Channel Index (CCI)
The Commodity Channel Index (CCI) is a technical analysis oscillator developed by Donald Lambert that measures the deviation of an asset's price from its statistical mean. Readings above +100 suggest overbought conditions, while readings below -100 indicate oversold conditions, and it can be used to identify trend strength and potential reversals. Despite its name, the CCI is widely used across all asset classes including stocks, forex, and crypto, not just commodities.
Example
“The CCI reading on the daily chart surged above +200, warning traders that the rally was becoming overextended and a pullback was likely.”