Eflatun CCI

The Eflatun CCI indicator identifies overbought and oversold market conditions while automatically detecting regular divergences and significant top/bottom price points. By integrating multiple moving average types and customizable threshold levels, this tool helps traders pinpoint potential trend reversals and momentum shifts with visual clarity.

Usage

The Usage section focuses on interpreting the indicator's visual cues and adapting its core logic to different market environments.

• Identifying Extremes: The indicator plots a CCI line with shaded areas when the value exceeds the "Top Line" or "Bottom Line" (default +/- 110). These regions represent standard overbought and oversold conditions.
• Divergence Signals: Regular bullish and bearish divergences are marked with "D" labels on the oscillator. A bullish divergence occurs when price makes a lower low while the CCI makes a higher low. Conversely, a bearish divergence occurs when price makes a higher high while the CCI makes a lower high.
• Alert Levels: Secondary threshold lines (default +/- 220) serve as "Alert" levels for extreme momentum. When these levels are breached, the indicator can change the chart's background or bar colors to highlight high-probability exhaustion zones.
• Trend Confirmation: Use the various MA types (e.g., HMA for speed or SMA for smoothness) to adjust how the CCI reacts to price fluctuations, allowing the tool to be used in both scalping and swing trading setups.

Details

The indicator calculates the Commodity Channel Index (CCI) by determining the difference between the current price source and its moving average, divided by the mean absolute deviation. To identify divergences, the script utilizes a fractal-based logic that looks back 5 bars to confirm local peaks and troughs in both price and the CCI values. By comparing these confirmed points, the script can accurately plot divergence signals two bars after the peak/trough occurred (offset -2).

Settings

• Length: Sets the lookback period for the CCI and its internal moving average.
• Source: Determines the price data used for calculations (e.g., Close, HL2, OHLC4).
• MA Type: Selects the smoothing method for the CCI calculation, including SMA, EMA, WMA, SWMA, VWMA, HMA, or RMA.
• Top/Bottom Line Value: Defines the primary overbought and oversold threshold levels.
• Alert Top/Bottom Value: Sets the secondary threshold levels for extreme momentum alerts.
• Alert Background/Bar Color: Toggles the visual highlights on the chart when extreme levels are reached.
• Label Size: Adjusts the size of the on-chart labels and the status table.
• Divergence: Enables or disables the calculation and plotting of divergence signals.

FAQ

How do I interpret the "D" labels on the oscillator?

The "D" labels indicate a regular divergence between price and momentum. A green label signifies a bullish divergence (potential upward reversal), while a red label signifies a bearish divergence (potential downward reversal).

What is the difference between the Top Line and the Alert Top Value?

The Top Line (default 110) marks the beginning of the overbought zone, while the Alert Top Value (default 220) marks an extreme extension that often precedes a sharp correction or consolidation.

How can I access this tool for my charts?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.