commodity channel index


CCI. An index used in technical analysis which shows cyclical patterns in commodities. For commodities that cycle on a 60-day basis an analyst would use a CCI of 20 days. To calculate the CCI you will need to know the typical price (TP), simply moving average of the typical price (SMATP) and the mean deviation. TP = (high + low + close)/3. The commodity channel index = (TP - SMATP) / (0.15 x mean deviation). The 0.15 is a constant. When the value of CCI is greater than +100 the security in question is said to be trending upward and a buy signal is generated.
A CCI value less than -100 indicates a sell signal.
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