Commodity Channel Index
An unbounded oscillator measuring how far the typical price sits from its moving average, scaled by mean deviation.
Formula
CCI = (Typical Price - SMA of Typical Price) / (0.015 x Mean Deviation), where Typical Price = (High + Low + Close) / 3
Unit
ratio (x, times)
In depth
The 0.015 constant exists solely to place roughly 70% to 80% of readings between -100 and +100; it has no analytical meaning and was chosen by the indicator's author for convenience. Despite its name the CCI applies to any instrument, not only commodities. It is unbounded, so extreme readings such as +300 are possible and are not comparable between securities with different volatilities. Conventional thresholds at plus and minus 100 are used both as reversal levels by range traders and as continuation levels by trend traders — an ambiguity worth noting before treating either reading as meaningful.
Worked example
Typical price (512 + 494 + 504) / 3 = ₹503.33, its 20-period average ₹495, mean deviation ₹8. CCI = (503.33 - 495) / (0.015 x 8) = 8.33 / 0.12 = 69.4.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Commodity Channel Index” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.