CCI Oil Technical Analysis & CCI Crude Trading Signals

Developed by Donald Lambert

Commodity Channel Index measures the variation of a commodity crude oil price from its statistical mean(statistical average).

This oil indicator is an oscillator which oscillates between high levels & low levels

When the CCI is high it shows that crude oil price is unusually high when compared to its average.

When the CCI is low it shows that crude oil price is unusually low compared to its average.

Oil Technical Analysis & How to Generate Crude Trading Signals

Overbought/ Oversold Levels

The CCI typically oscillates between ±100.

Indicator values above +100 indicate an overbought conditions & an impending market correction.

Indicator values below -100 indicate an oversold conditions & an impending market correction

Buy Trading Signal

If the CCI indicator is over-sold, areas below -100, then there is a pending market correction.

The over-sold areas will remain intact until Commodity Channel Index indicator starts to move above -100.

When crude oil price starts moving above -100 then that's interpreted as a buy.

The Commodity Channel buy oil trading signal should be combined with a oil trend-line break signal to confirm the buy.

Buy Trade

Sell Crude Trading Signal

If the Commodity Channel Index is over bought, levels above +100, then there's a pending market correction.

Over bought levels will remain intact until CCI indicator starts to move below +100.

When crude oil price starts moving below +100 then that is a interpreted as sell.

This Commodity Channel sell oil trading signal should be combined with a oil trend-line break signal to confirm the sell.

Sell Trade

Divergence Oil

Bullish Crude Trading Divergence Setup

Bullish divergence occurs when crude oil price is making new lows while the CCI is failing to surpass its previous low.

This is a bullish signal because the divergence will be followed by an upwards market correction.

Bearish Oil Trading Divergence Setup

Bearish Divergence occurs when crude oil price is making new highs while the CCI is failing to surpass its previous high.

This is a bearish signal because the divergence will be followed by a downwards market correction.

Technical Analysis in Crude Trading