I see a lot of literature that suggests the Ichimoku Cloud is either a trend indicator or an oscillator, well from my experience it can be used as both. When price action is very far away from the bottom or top cloud line, depending on whether it’s a bear or bull market, then price will begin to be considered over sold/bought. How far away does price have to be before a reversal? That depends on the time frame; if you’re looking at an intraday chart then the daily average volatility would be a good estimate of how far price can go away from its cloud before it may reverse. Whereas in general when price action is above/below the cloud this indicates an up/down trend, also the 21 day lagging line should be above/below the cloud and the fast moving average above/below the slow moving average.
The trend indicator is only complete when all those factors match.