Commodity Channel Index
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.
And, what is the mean deviation? It is the simple moving average of the sum of the differences between each periodÃ¢â‚¬â„¢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.