Commodity Channel Index (CCI)
A versatile indicator that can be used to identify a new trend or warn of extreme conditions.
Usage
Use to identify cyclical turns in commodities or stocks. Readings above +100 imply a strong uptrend, while readings below -100 imply a strong downtrend.
Background
Developed by Donald Lambert in 1980, the CCI measures the current price level relative to an average price level over a given period. CCI is relatively high when prices are far above their average and relatively low when prices are far below their average. — StockCharts ChartSchool
Parameters
timeperiod(default: 14): Lookback period
Formula
[ CCI = \frac{Price - SMA}{0.015 \times \text{Mean Deviation}} ]