CCI Divergence
When the Commodity Channel Index moves against price, hinting a move may be losing force.
Quick answer
CCI divergence is price and the Commodity Channel Index moving in opposite directions, hinting at fading momentum.
Definition
CCI divergence happens when price makes a new high or low but the Commodity Channel Index fails to confirm it. The mismatch suggests momentum is fading and a reversal may be near. It is one signal among many, so treat it as a warning rather than a trigger.
How It Works
- Price and the indicator disagree on the new extreme
- It warns momentum is running out
- It is most useful at swing extremes
Trading Tips
1
Combine it with a trendline or level for confirmation
2
Ignore divergence in a strong one-directional trend
3
Use it on a timeframe that matches your hold period
Related Terms
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