Key Momentum Shifts

  • Information Technology (XIJ), Health Care (XHJ), Materials (XMJ) and Resources (XJR) remain in the Leading quadrant, indicating strong relative momentum.
  • Health Care recorded the strongest daily gain at 7.81%, reinforcing its position as one of the market's leading sectors.
  • Utilities (XUJ) remains in the Improving quadrant, signalling continued recovery 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 the Weakening quadrant.

The latest Relative Rotation Graph (RRG) for 18 August 2026 indicates that sector momentum across the Australian Equity market remains concentrated. Information Technology, Health Care, Materials and Resources continue to occupy the Leading quadrant, while Utilities remains the only sector in Improving.

The strongest daily performance came from Health Care, which surged 7.81%, followed by Energy at 0.99% and Utilities at 0.89%. Despite these gains, the RRG continues to show a wide gap between the leading group and the seven sectors positioned in Lagging, highlighting relatively narrow momentum breadth.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 18/08/2026). Powered by: amibroker.com.

Leading Quadrant

Four sectors remain in the Leading quadrant: Information Technology (XIJ), Health Care (XHJ), Materials (XMJ) and Resources (XJR).

Information Technology remains the strongest sector on the RRG, positioned well into the Leading quadrant. Health Care also maintains a strong position and recorded an exceptional 7.81% daily advance, strengthening its short-term performance.

Materials and Resources remain firmly positioned in Leading, despite their more modest daily gains of 0.15% and 0.35%, respectively.

The continued presence of these four sectors in Leading indicates that relative strength remains concentrated among Technology, Health Care and commodity-related exposures rather than broadly distributed across the market.

Improving Quadrant

Utilities (XUJ) remains the only sector in the Improving quadrant.

XUJ gained 0.89% during the latest session and continues to move through the Improving area of the RRG. If its trajectory continues upward and to the right, Utilities could eventually challenge the Leading quadrant.

However, further improvement in both relative strength and momentum would be required to confirm a sustained transition into Leading.

The lack of additional sectors in Improving continues to highlight the limited breadth of the current momentum recovery.

Weakening Quadrant

There are currently no sectors in the Weakening quadrant.

The absence of sectors in Weakening indicates that the current rotation is not characterised by a broad deterioration from Leading into Weakening. Instead, sector momentum remains concentrated between Leading, Improving and Lagging.

Lagging Quadrant

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

Energy's position is particularly notable. Despite gaining 0.99% during the latest session, XEJ remains in Lagging on the RRG, indicating that its relative momentum versus the broader market remains weaker.

Financials, Consumer Discretionary and Communication Services also remain among the weaker areas, while Real Estate, Consumer Staples and Industrials continue to trade below the central RRG boundary.

The concentration of seven sectors in Lagging continues to highlight relatively weak momentum breadth. A sustained movement by these sectors toward Improving would provide stronger evidence of a broader recovery.

Strategic Summary

The latest RRG shows that ASX sector momentum remains highly concentrated. Information Technology, Health Care, Materials and Resources continue to lead, with Health Care showing particularly strong short-term performance after gaining 7.81%.

Utilities remains the only sector in Improving, while seven sectors continue to occupy Lagging. The absence of sectors in Weakening suggests that the current rotation remains concentrated rather than reflecting widespread deterioration among previous leaders.

Technology remains the strongest relative leader, while Health Care's sharp daily advance adds further support to the Leading group. Sustained improvement in Utilities and movements from Lagging into Improving would provide stronger evidence that momentum is broadening across the Australian equity market.