ASX Sector Momentum: Early Signs of Life in the Lagging Materials Sector

Robert Luong

26 March 2026 10:20 AM AEDT

ASX Sector Momentum: Early Signs of Life in the Lagging Materials Sector

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Key Highlights

The "Green Shoot" in Materials: Despite remaining firmly entrenched in the Lagging quadrant, Materials (XMJ) is exhibiting initial signs of rising momentum, suggesting the aggressive selling pressure may finally be reaching a point of exhaustion.
Index-Wide Deterioration: The broader market context remains defensive, with nine of the twelve ASX sectors, including former leaders like Energy (XEJ) and Info Tech (XIJ), displaying negative, leftward momentum trajectories.
The Resilient Few: Health Care (XHJ) and Consumer Discretionary (XDJ) stand alone in the Improving quadrant, successfully pushing upward and to the right against the prevailing macro trend.

The latest momentum chart paints a picture of a market grappling with widespread fatigue. However, for astute technical watchers, the most actionable data may not be in the leaders, but deep in the bottom-left corner of the chart. While the broader index continues to bleed relative strength, the heavily battered Materials sector is showing the earliest technical whispers of a momentum shift.

Daily ASX Sector Momentum chart – 25/03/2026

ASX Sector Daily Momentum Chart (at the closing price of 25th March 2026). Powered by: amibroker.com

Daily ASX Sector Momentum Summary – 25/03/2026

Quadrant Analysis: Searching for the Bottom

The Lagging Turnaround Candidate

Materials (XMJ): It takes careful observation to spot, but the momentum profile for Materials is beginning to stabilize. While its relative strength versus the ASX 200 remains poor (keeping it in the Lagging zone), a slight upward shift in its momentum vector suggests that the worst of the recent cyclical liquidation may be priced in. This is often the first technical prerequisite for a transition into the Improving quadrant.

The Fading Heavyweights

Energy (XEJ): The rotation out of supply-shock plays is accelerating. Energy remains high in the Leading quadrant, but its trajectory is hooking sharply down and to the left, indicating a rapid unwinding of its previous market dominance.
Financials (XFJ) & Resources (XJR): Stuck in the Weakening quadrant with downward trajectories, the major banks and diversified miners are actively dragging on the index. Notably, the broader Resources basket has yet to confirm the early momentum stabilization seen in the core Materials sector.

The Defensive Outliers

Health Care (XHJ): Positioned highest in the Improving quadrant, this sector continues to exhibit the strongest positive momentum on the chart. It serves as the primary destination for capital rotating out of the weakening cyclical and energy names.

Strategic Outlook

The momentum chart for March 25, 2026, requires investors to look beyond the obvious. The market is highly defensive, and capital concentration has dispersed. However, the initial signs of rising momentum in Materials (XMJ) present a classic early-stage contrarian setup. While Health Care offers the clearest immediate relative strength, active traders will be watching the mining giants closely to see if this subtle momentum curl can evolve into a sustained cyclical bottom.

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