Commodity Channel Index — identifies cyclical trends in a security by measuring the difference between the current price and its statistical average. Values above +100 suggest overbought conditions, while readings below -100 indicate oversold territory. Traders use the CCI to spot potential reversals and confirm trend strength, making it a versatile tool across multiple timeframes and asset classes.
Example
“The CCI on the 4-hour chart dropped below -100, signaling oversold conditions and prompting traders to watch for a reversal pattern.”