Commodity Channel Index (CCI)
CCI measures how far the price is from its statistical average. High positive values (above +100) suggest the stock is overbought, while low negative values (below -100) suggest oversold.
Traders use CCI to spot reversals and trends, similar to an RSI. A move above +100 can signal strong bullish momentum, while a dip below -100 can indicate bearish pressure. Extreme levels of +200 and -200 are also possible.
For example, if Larsen & Toubro’s CCI shoots above +120, traders may see it as a breakout with strong momentum backing it or they may also watch it for a potential overbought reversal.
Parameter | Description | Default Value |
---|---|---|
Window | Number of periods for calculation | 14 |