ASX Sector Momentum: Energy Moves into Lagging as Leadership Remains Concentrated

Robert Luong

04 November 2026 06:38 AM AEDT

ASX Sector Momentum: Energy Moves into Lagging as Leadership Remains Concentrated

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Key Highlights

Energy (ASX:XEJ) has moved into the Lagging quadrant, joining Materials, Resources and Information Technology.
Real Estate (ASX:XPJ), Communication Services (ASX:XTJ), Industrials (ASX:XNJ), Financials (ASX:XFJ) and Healthcare (ASX:XHJ) remain in Leading.
Consumer Discretionary (ASX:XDJ), Consumer Staples (ASX:XSJ) and Utilities (ASX:XUJ) are positioned in Weakening, with positive relative strength but negative momentum.
Materials (ASX:XMJ), Resources (ASX:XJR), Information Technology (ASX:XIJ) and Energy (ASX:XEJ) occupy Lagging, reflecting negative relative strength and momentum.
No sector is clearly positioned in Improving at the latest displayed endpoints, leaving the quadrant picture divided between established leaders, weakening sectors and laggards.

The Relative Performance Visualization dated 3 November 2026 shows a notable deterioration in the Energy sector’s relative momentum. Energy has moved from Weakening into Lagging, joining Materials, Resources and Information Technology in the lower-left quadrant. Meanwhile, Real Estate, Communication Services, Industrials, Financials and Healthcare remain in Leading. Consumer Discretionary, Consumer Staples and Utilities occupy Weakening, while no sector has established a clear position in Improving. The latest configuration therefore highlights concentrated Leadership alongside a larger group of sectors experiencing negative momentum.

Relative Performance Visualization

ASX Sector Relative Momentum Chart (at the closing price of 03/11/2026). Powered by: amibroker.com.

Energy Moves into Lagging

Energy (ASX:XEJ) is the key quadrant change in the latest chart. Its endpoint is now positioned to the left of the vertical axis and below the horizontal axis, placing it in Lagging. This configuration indicates that both relative strength and momentum are negative at the latest plotted point. The move from Weakening into Lagging is significant because it shows that the sector has lost its positive relative-strength position as well as continuing to register negative momentum.

The endpoint sits close to the vertical axis, so the transition should be monitored for confirmation in subsequent readings. A move back to the right of the vertical axis would indicate an improvement in relative strength, although the sector would need to move above the horizontal axis to return to positive momentum. Continued positioning in the lower-left quadrant would reinforce the current Lagging classification. The RRG measures relative technical positioning and does not, by itself, establish the fundamental outlook or forecast absolute returns.

Leading Sectors Retain Positive Momentum

Real Estate (ASX:XPJ), Communication Services (ASX:XTJ), Industrials (ASX:XNJ), Financials (ASX:XFJ) and Healthcare (ASX:XHJ) remain in Leading. Their latest endpoints are positioned to the right of the vertical axis and above the horizontal axis, indicating positive relative strength and positive momentum. Real Estate and Communication Services are positioned within the upper-right region, while Industrials and Financials also retain positive readings. Healthcare is closer to the horizontal boundary than some of the other leaders, making its latest classification more sensitive to a change in momentum.

Although all five sectors occupy the same quadrant, their trails are not identical. The plotted paths show that momentum has fluctuated over the look-back period, particularly for Financials and Healthcare. The latest quadrant classification reflects the most recent endpoint, rather than demonstrating that momentum has strengthened continuously. Further movement away from both central axes would provide stronger confirmation of leadership; a fall below the horizontal axis would signal a shift into Weakening.

Consumer and Utilities Sectors Remain Weakening

Consumer Discretionary (ASX:XDJ), Consumer Staples (ASX:XSJ) and Utilities (ASX:XUJ) are positioned in Weakening. Each remains to the right of the vertical axis but below the horizontal axis, indicating positive relative strength alongside negative momentum. In other words, these sectors retain a positive relative-strength position, but their momentum readings have moved below zero.

Consumer Discretionary and Consumer Staples are positioned relatively close to one another, with both showing negative momentum. Utilities is further to the right on the relative-strength axis but remains below the horizontal boundary. A recovery above the horizontal axis would indicate a return to positive momentum and could place these sectors back in Leading if relative strength remains positive. Conversely, a move left of the vertical axis would signal a transition into Lagging.

Materials, Resources and Technology Remain Lagging

Materials (ASX:XMJ), Resources (ASX:XJR) and Information Technology (ASX:XIJ) remain in the Lagging quadrant alongside Energy. Their latest endpoints are positioned below the horizontal axis and to the left of the vertical axis, indicating negative momentum and negative relative strength. Materials and Resources are located deep in the lower-left region, while Information Technology also remains well below and to the left of the central intersection.

The trails show some changes in direction during the displayed period, but none of these sectors has crossed into Improving at the latest endpoint. A move above the horizontal axis while remaining left of the vertical axis would be the first indication of positive momentum relative to the benchmark and would place a sector in Improving. Until that transition occurs, their current positions continue to reflect comparatively weak relative performance.

Bottom Line

The ASX sector momentum chart for 3 November 2026 shows five sectors in Leading: Real Estate, Communication Services, Industrials, Financials and Healthcare. Consumer Discretionary, Consumer Staples and Utilities remain in Weakening, while Energy has moved into Lagging alongside Materials, Resources and Information Technology. No sector is clearly positioned in Improving at the latest plotted point. The most important change is Energy’s transition into Lagging, which signals deterioration in both relative strength and momentum. Follow-through in subsequent RRG readings will help determine whether this weakness persists or begins to reverse.

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