The Commodity Channel Index (CCI) is a momentum indicator that measures the current price of a stock in relation to its average price over a period of time (typically 20 days).
The CCI calculation starts by taking the average of the high, low and close price over set period. In the case of a 20-day CCI, it would then subtract the 20-day moving average.
The precise formula is:
Typical Price - Moving Average of Typical Price / (0.015 x Mean Deviation)
In the majority of cases, the CCI value will range from -100% to 100% and can be used to generate buy and sell signals. The CCI settings modal offers customisable ‘overbought’ and ‘oversold’ levels. By default, these are set to +100 for overbought and -100 for oversold.