Key Momentum Shifts 

  • Defensive Leadership Remains Dominant: Health Care (XHJ) and Consumer Staples (XSJ) continue to occupy prominent positions within the Leading quadrant, confirming sustained institutional preference for defensive earnings and stable cash-flow businesses. 
  • Financials and Utilities Strengthen Their Recovery: Financials (XFJ) and Utilities (XUJ) continue advancing through the Improving quadrant, signaling growing momentum and increasing investor interest following extended periods of underperformance. 
  • Communication Services Maintains Leadership: Communication Services (XPJ) remains within the Leading quadrant, preserving positive relative strength despite some moderation in momentum. 
  • Real Estate and Energy Remain Trapped in Lagging: Real Estate (XJR) and Energy (XEJ) continue to occupy the Lagging quadrant, reflecting persistent relative underperformance and limited institutional sponsorship. 

The latest Relative Rotation Graph suggests the ASX remains in a constructive but increasingly selective environment. Leadership remains concentrated among a handful of sectors exhibiting superior relative strength, while several previously lagging sectors continue to improve their momentum profiles. 

The ongoing rotation toward Financials, Utilities, and Technology suggests institutional investors are gradually broadening market participation. However, the continued weakness in Energy and Real Estate indicates capital remains highly selective. 

ASX Sector Momentum Summary 

 

ASX Sector Relative Momentum Chart (at the closing price of 18/06/2026). Powered by: amibroker.com 

Momentum Breakdown by Quadrant 

The Leading Quadrant (The Established Leaders) 

Health Care (XHJ) and Consumer Staples (XSJ) 

  • Health Care and Consumer Staples continue to dominate the leadership group. Both sectors maintain strong relative strength readings and remain preferred destinations for investors seeking earnings stability amid an increasingly selective market environment. 
  • Although momentum has moderated from previous peaks, their leadership positions remain firmly intact. 

Industrials (XIJ) and Consumer Discretionary (XDJ) 

  • Industrials and Consumer Discretionary remain within the Leading quadrant but continue to exhibit declining momentum profiles. While relative strength remains superior to the broader market, the gradual loss of momentum suggests their leadership phase may be becoming more mature. 
  • Investors should monitor these sectors closely for signs of a potential rotation into Weakening. 

Communication Services (XPJ) and Clean Energy (XNJ) 

  • Communication Services remains firmly inside the Leading quadrant and continues to benefit from positive relative strength. Clean Energy also maintains leadership status, although both sectors have experienced some moderation in momentum compared with earlier periods. 
  • Their ability to remain in Leading despite recent momentum deceleration highlights ongoing institutional support. 

The Improving Quadrant (The Recovery Candidates) 

Utilities (XUJ) 

  • Utilities continue to display one of the strongest recovery trajectories on the chart. Momentum has improved substantially while relative strength gradually recovers from deeply negative levels. 
  • The sector remains one of the most compelling candidates to enter the Leading quadrant in coming weeks. 

Financials (XFJ) 

  • Financials continue progressing through the Improving quadrant, reflecting strengthening momentum and renewed investor confidence in the banking sector. 
  • The sector's trajectory suggests institutional accumulation is gradually increasing, potentially laying the foundation for future leadership. 

Information Technology (XTJ) 

  • Technology remains firmly within Improving and continues to recover from its previous period of weakness. While relative strength remains below benchmark levels, momentum continues to trend positively. 
  • Further improvement could eventually support a move toward leadership territory. 

The Weakening Quadrant (Leadership Under Pressure) 

Materials (XMJ) 

  • Materials remain positioned within the Weakening quadrant despite posting strong absolute performance recently. The sector continues to exhibit positive relative strength, but momentum remains under pressure. 
  • This divergence suggests investors are increasingly allocating capital toward sectors with stronger momentum profiles rather than relying solely on commodity-linked leadership. 

The Lagging Quadrant (Persistent Underperformers) 

Real Estate (XJR) 

  • Real Estate remains trapped within the Lagging quadrant, indicating continued weakness in both relative strength and momentum. 
  • Despite occasional periods of stabilization, the sector has yet to demonstrate sufficient improvement to justify a more constructive outlook. 

Energy (XEJ) 

  • Energy remains one of the weakest sectors on the chart. Although momentum has improved marginally, relative strength continues to lag significantly behind the broader market. 
  • Until a meaningful improvement in relative strength emerges, Energy is likely to remain a market laggard. 

Strategic Summary 

The June 18 sector rotation profile continues to favour defensive and high-quality sectors. Health Care, Consumer Staples, Communication Services, Industrials, Consumer Discretionary, and Clean Energy remain the primary leadership groups, while Utilities, Financials, and Technology continue to strengthen within the Improving quadrant. 

The most constructive development remains the steady recovery in Utilities and Financials, both of which appear increasingly capable of joining the leadership group. Conversely, Real Estate and Energy remain structurally weak and continue to occupy the least attractive positions on the RRG. 

Overall, the current momentum structure suggests the ASX remains healthy, with leadership gradually broadening while investors continue to reward sectors exhibiting improving relative momentum and stable earnings characteristics.