From Traderpedia

Definition: Commodity Channel Index technical indicator.

The CCI is an oscillator used in technical analysis to help determine when a security has been overbought and oversold. CCI can also be used for timing buy/sell signals. CCI, first developed by Donald Lambert, compares the current mean price with the average mean price over a period of usually 20 days.

[edit] Calculation

It calculates a simple moving average of the price average – [(High + Low + Close)/3] – in a given time period, and then it calculates the mean deviation.

And, what is the mean deviation? It is the simple moving average of the sum of the differences between each period’s average price and its simple moving average.

This mean deviation is then multiplied by a constant scaling factor of 0.015. The result is expressed as a single number that may be either positive or negative; one can vary the number of periods used to calculate the simple moving average.