Key Momentum Shifts

  • Energy Remains in Leading: Energy (XEJ) continues to occupy the Leading quadrant and remains the strongest established sector on the RRG.
  • Financials Remains Improving: Financials (XFJ) continues to show strengthening relative momentum within the Improving quadrant.
  • Industrials Enters Improving: Industrials (XNJ) has moved into Improving, marking a positive shift from its previous position near the Lagging/Improving boundary.
  • Consumer Staples Remains Improving: Consumer Staples (XSJ) continues to display improving relative momentum.
  • Information Technology Enters Lagging: Information Technology (XIJ) has moved from Weakening into Lagging, signalling a further deterioration in relative momentum.
  • Healthcare Remains Weakening: Health Care (XHJ) remains in Weakening despite maintaining strong relative strength.
  • Utilities, Resources and Materials Remain Weakening: XUJ, XJR and XMJ continue to hold relatively strong positions but are experiencing declining momentum.
  • Four Sectors Remain Lagging: Consumer Discretionary (XDJ), Real Estate (XPJ), Technology (XTJ) and Information Technology (XIJ) remain in the Lagging quadrant.

The latest Relative Rotation Graph for 4 September 2026 presents a mixed but increasingly differentiated picture of ASX sector momentum. Energy (XEJ) remains in Leading, while Financials (XFJ), Consumer Staples (XSJ) and Industrials (XNJ) are positioned in Improving. The major change is Information Technology (XIJ), which has now entered Lagging from Weakening. The chart on page 2 of the reference article illustrates the same RRG framework used to assess these quadrant transitions.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 04/09/2026). Powered by: amibroker.com.

Leading Quadrant

Energy continues to occupy the upper-right portion of the RRG, confirming both positive relative strength and positive momentum. Its position indicates that Energy remains the most established Leadership area of the ASX sector universe.

The sector's continued position in Leading is particularly important because it distinguishes Energy from several other sectors that retain strong relative positions but have already begun losing momentum. Continued movement toward the upper-right would reinforce its leadership, while a move toward the centre would signal moderation.

Improving Quadrant

Financials remains in Improving, indicating that relative momentum continues to strengthen. Its trajectory suggests that the sector is recovering relative strength and could eventually challenge the Leading quadrant if the movement toward the upper-right continues.

Consumer Staples also remains in Improving. Its position indicates improving relative momentum, although it has not yet established the stronger relative-strength profile associated with Leading. A continued upward and rightward trajectory would provide stronger evidence of a transition toward leadership.

Industrials (XNJ) has now entered Improving, representing one of the most important changes in the latest chart. The sector has moved across the horizontal midpoint from its previous position near the Lagging/Improving boundary.

This transition indicates that Industrials is beginning to recover momentum relative to the broader ASX market. However, the sector remains relatively close to the centre, meaning further movement toward the upper-right would be needed to confirm a more established recovery.

Weakening Quadrant

Health Care continues to occupy a strong position on the relative-strength axis but remains below the momentum midpoint. This combination indicates that the sector still has substantial relative strength, but its momentum is deteriorating.

Utilities similarly remains relatively strong but has moved into a weaker momentum position. A continued decline toward the centre would increase the risk of a transition into Lagging.

Resources and Materials also remain in Weakening. Their positions suggest that previous relative strength is losing momentum. A sustained move back above the horizontal midpoint would be required to signal renewed positive momentum.

The concentration of these sectors in Weakening is important because it suggests that several areas that remain relatively strong are no longer experiencing the same degree of momentum support.

Lagging Quadrant

Consumer Discretionary and Real Estate remain among the weaker sectors on the RRG. Their positions below the key midlines indicate both relatively weak performance and subdued momentum.

Technology (XTJ) also remains in Lagging, indicating that its relative momentum has yet to establish a convincing recovery.

The most significant change is Information Technology (XIJ), which has now entered Lagging from Weakening. This represents a deterioration in its momentum profile. The move below the relevant RRG boundary indicates that the sector is no longer simply losing momentum while retaining a relatively neutral position; it has now entered a quadrant associated with weaker relative performance.

Further movement toward the lower-left would reinforce the bearish momentum signal, while a Reversal back toward the centre would provide an early indication of stabilisation.

Bottom Line

The 4 September 2026 ASX RRG continues to show selective sector rotation rather than broad-based momentum. Energy (XEJ) remains the only sector in Leading, confirming its position as the strongest established momentum sector.

The most encouraging developments are Financials (XFJ), Consumer Staples (XSJ) and particularly Industrials (XNJ) in Improving. The move of Industrials into Improving provides an early indication of recovering relative momentum and could become more significant if the sector continues moving toward the upper-right.

Meanwhile, Information Technology (XIJ) has entered Lagging, representing the clearest negative momentum transition in the latest chart. Health Care, Utilities, Resources and Materials remain in Weakening, suggesting that their relative strength is not currently being supported by improving momentum.

Overall, the ASX sector rotation picture remains mixed, with Energy maintaining leadership, Industrials and Financials improving, and Information Technology moving into a weaker momentum phase. Continued movement of the Improving sectors toward Leading would provide stronger confirmation of a broader market rotation. The reference article uses the same quadrant-based framework to distinguish established leaders, emerging improvements and sectors experiencing momentum deterioration.