ASX Sector Momentum Update: Health Care Leads as Seven Sectors Remain Lagging

Robert Luong

20 August 2026 10:03 AM AEST

ASX Sector Momentum Update: Health Care Leads as Seven Sectors Remain Lagging

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Key Momentum Shifts

Health Care (XHJ), Information Technology (XIJ), Materials (XMJ), Resources (XJR) and Utilities (XUJ) are positioned in the Leading quadrant, indicating relatively strong momentum and relative strength.
Health Care remains the strongest sector on the chart, while Information Technology continues to occupy a particularly strong relative position.
Utilities (XUJ) has moved into the Leading quadrant, marking a positive improvement in relative momentum.
Energy (XEJ), Financials (XFJ), Consumer Discretionary (XDJ), Real Estate (XPJ), Communication Services (XTJ), Consumer Staples (XSJ) and Industrials (XNJ) remain in Lagging.
Seven sectors are positioned in Lagging, while no sectors currently occupy either the Improving or Weakening quadrants.

The latest Relative Rotation Graph (RRG) for 19 August 2026 indicates that sector momentum across the Australian Equity market remains highly selective. Health Care (XHJ), Information Technology (XIJ), Materials (XMJ), Resources (XJR) and Utilities (XUJ) occupy the Leading quadrant, maintaining a clear concentration of relative strength within a limited group.

The most notable positive shift is the movement of Utilities (XUJ) into Leading. At the same time, seven sectors remain in Lagging, highlighting continued weakness in overall momentum breadth despite the presence of several strong leaders.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 19/08/2026). Powered by: amibroker.com.

Leading Quadrant

The presence of five sectors in Leading indicates that Health Care, Information Technology, Materials, Resources and Utilities currently represent the principal sources of relative strength in the Australian equity market.

Health Care (XHJ) remains one of the strongest sectors on the chart and also recorded the strongest daily performance, gaining 2.60% on 19 August. Information Technology (XIJ) remains positioned strongly in Leading despite declining 3.15% during the latest session, highlighting the difference between short-term price performance and longer-term relative momentum.

Materials (XMJ) and Resources (XJR) also remain firmly positioned in Leading, although their daily performances were relatively modest at -0.07% and 0.09%, respectively.

Utilities (XUJ) has strengthened sufficiently to move into the Leading quadrant. Its position suggests that relative momentum has improved and that the sector is becoming a more important contributor to the market's Leadership structure.

The continued presence of five sectors in Leading indicates that leadership has broadened from the previous configuration. However, the concentration of relative strength within these sectors suggests that momentum remains unevenly distributed across the market.

Improving Quadrant

There are currently no sectors in the Improving quadrant.

The absence of sectors in Improving indicates that none of the lagging sectors has yet established a sufficiently strong improvement in relative momentum to signal a potential transition toward Leading.

This is an important feature of the latest RRG because it suggests that the current leadership structure remains relatively established, while the weaker sectors have yet to generate convincing rotation signals.

Weakening Quadrant

There are currently no sectors in the Weakening quadrant.

The absence of sectors in Weakening suggests that none of the current Leading sectors is showing a sufficiently significant deterioration in relative momentum to move through this quadrant.

This supports the view that the Leading group remains relatively stable, although continued monitoring of the trajectories of Health Care, Information Technology, Materials, Resources and Utilities will be important to identify any future deterioration.

Lagging Quadrant

Seven sectors are currently positioned in Lagging: Energy (XEJ), Financials (XFJ), Consumer Discretionary (XDJ), Real Estate (XPJ), Communication Services (XTJ), Consumer Staples (XSJ) and Industrials (XNJ).

Energy remains in Lagging despite gaining 0.77% during the latest session. This highlights that a positive daily return does not necessarily indicate improving relative momentum.

Financials declined 0.64%, while Consumer Discretionary fell 0.58% and Real Estate declined 1.15%. Communication Services, Consumer Staples and Industrials recorded only marginal daily movements, but their RRG positions remain within Lagging.

The concentration of seven sectors in Lagging continues to highlight relatively weak momentum breadth. A sustained move by these sectors toward the centre of the RRG and eventually into Improving would provide stronger evidence of a broader recovery in market participation.

Strategic Summary

The latest RRG shows that ASX sector momentum remains concentrated, although leadership has broadened with five sectors now positioned in Leading. Health Care, Information Technology, Materials, Resources and Utilities represent the strongest areas of relative momentum.

The move of Utilities into Leading is the key positive rotation in the latest RRG, while the continued presence of seven sectors in Lagging highlights the uneven nature of the market.

Health Care stands out as the strongest combination of relative momentum and recent price performance, gaining 2.60% in the latest session. By contrast, Information Technology remains a strong relative leader despite its sharp 3.15% daily decline, suggesting that short-term price weakness has not yet overturned its broader relative position.

Looking ahead, further strengthening in Utilities and sustained leadership from Health Care, Technology, Materials and Resources would support the current positive rotation. At the same time, movement of Financials, Consumer Discretionary, Real Estate, Communication Services, Consumer Staples, Industrials and Energy from Lagging into Improving would provide stronger evidence of a broader and more sustainable recovery in ASX sector momentum.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.