top of page
Bilgisayar Yazılım Rehberlik

COMMODITY CHANNEL INDEX

It is the indicator developed by Donald Lambert for the commodity markets. It can also be used in the stock market due to its structure. It is essentially a trend indicator. Many analysts also use it as an overbought indicator. It has a very active structure and can catch trend starts in short-term markets, especially in horizontally developing markets. While calculating Cci, it is calculated with the help of an average created by adding the lowest, highest and closing value in the specified period and dividing by three. It shows how far prices are moving away from the moving average.

The reference values ​​are +100 and -100, and they can reach these reference values ​​even in small price movements. Although the period value varies according to the analyst's perspective, term and strategy, 14 periods are generally used.

For Buy-Sell signals
Intersection with moving average added to 1-CCI.
2-Intersections with reference values.
3-Positive and negative discrepancies between the price chart and the indicator are used.

In the 1980s, Donald Lambert created a substructure for the cci indicator, observing that prices exhibit certain movements in certain periods while trading in commodity markets. According to Lambert, as prices move for a period of 22 days in the markets in which he trades and half of this movement is up and the other half is falling, Lambert chose to use the cci indicator for 11 days. It should not be forgotten that the trader's maturity, the chart period he watches affects his analysis, strategy and the technical analysis methods he uses. Therefore, we recommend that each analyst make a period selection based on his experience after digesting the indicators.

Examples of CCI are given in the charts below.

Buy-sell signals from CCI and its average

WhatsApp Image 2021-03-25 at 21.30.01.jp

In the graph shown above, the green line shows the 14-period CCI indicator. is the 5-period simple moving average of the 14-period CCI on the red line. As seen in the chart, if buying is made at the points where the green line crosses over the red line and sales are made at the points where it crosses below, it is seen to what extent the decreases and increases seen in the chart are caught.

buy and sell signals from disputes;

While the second bottom seen in the price is formed lower than the first bottom, the second bottom in the indicator is formed higher as seen in the graph. Disputes are assumed to be one of the strong buy and sell signals used in technical analysis. The positive mismatch is shown in the chart below.

WhatsApp Image 2021-03-25 at 21.28.56.jp

Positive mismatches are sought at the bottom of the chart for buying positions. For sales, negative disputes are looked at on the top of the chart.

An example of negative mismatch is shown below.

WhatsApp Image 2021-03-25 at 21.26.36.jp

AUTHOR:

Ali Erkan TANACIOĞLU

“Investment information, comments and recommendations contained herein are not within the scope of investment consultancy.

Investment consultancy service; It is offered within the framework of an investment consultancy agreement to be signed between brokerage houses, portfolio management companies, banks that do not accept deposits and the customer.

The ratings contained herein are based on comments and personal opinions. These views may not be suitable for your financial situation and risk and return preferences.

Therefore, making an investment decision based solely on the information contained herein may not produce results in line with your expectations. "

bottom of page