CCI (Commodity Channel Index): calculation and reading

CCI measures how far the typical price deviates from its moving average and standardizes it with the mean absolute deviation.

Updated：2026-11-08

Calculation

1. Typical price TP = (high + low + close) ÷ 3.
2. Take the N-day simple moving average of TP (default 14 days).
3. Calculate the mean absolute deviation of TP from that average over the last N days.
4. CCI = (today’s TP − moving average of TP) ÷ (constant × mean absolute deviation), where the constant defaults to 0.015.

The denominator uses the mean absolute deviation, not the standard deviation.

How to read it

• CCI is centered on 0 and has no fixed upper or lower limit. Common reference lines are +100 and −100: beyond them, the typical price is relatively far from its average.
• This only describes where the value sits; in a strong or weak trend, CCI can stay outside the reference lines for a long time.

Limits

CCI has no upper or lower limit, so values for different stocks or different periods cannot be compared directly in size; it describes prices that have already happened and does not predict the future.

Where the idea comes from

CCI was introduced by Donald Lambert in 1980. This article explains it in our own words.

This article only explains the calculation and how to read a chart. It is not investment advice.