ASX Sector Momentum Update: Six Sectors Lead While Six Remain in Lagging

Robert Luong

24 August 2026 09:44 AM AEST

ASX Sector Momentum Update: Six Sectors Lead While Six Remain in Lagging

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Key Momentum Shifts

Health Care (XHJ), Information Technology (XIJ), Materials (XMJ), Resources (XJR), Utilities (XUJ) and Energy (XEJ) are positioned in the Leading quadrant, representing the strongest areas of relative momentum.
Health Care (XHJ) maintains the strongest position within Leading, remaining well into the upper-right area of the RRG.
Information Technology (XIJ) remains firmly in Leading, although its downward trajectory indicates that relative momentum is moderating.
Materials (XMJ) and Resources (XJR) continue to display constructive trajectories within Leading, supporting their positions among the market's stronger sectors.
Utilities (XUJ) remains in Leading, with its trajectory continuing to point upward and to the right.
Energy (XEJ) remains in Leading but is positioned much closer to the centre of the RRG, making its trajectory important to monitor.
Financials (XFJ), Consumer Discretionary (XDJ), Real Estate (XPJ), Communication Services (XTJ), Consumer Staples (XSJ) and Industrials (XNJ) remain in Lagging.

The latest Relative Rotation Graph (RRG) for 21 August 2026 shows a concentrated momentum structure across the Australian Equity market. Six sectors are positioned in Leading, while six remain in Lagging. No sectors currently occupy either Improving or Weakening.

The chart therefore continues to show a clear separation between the market's relative leaders and weaker sectors. The expansion of Energy into Leading, together with the continued strength of Health Care, Materials, Resources and Utilities, suggests that positive momentum remains concentrated within a defined group of sectors.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 21/08/2026). Powered by: amibroker.com.

Leading Quadrant

Health Care (XHJ), Information Technology (XIJ), Materials (XMJ), Resources (XJR), Utilities (XUJ) and Energy (XEJ) are currently positioned in the Leading quadrant.

Health Care (XHJ) maintains the strongest position within the Leading group. Its location near the upper-right area of the RRG indicates strong relative strength and momentum. Although its trajectory has turned somewhat downward, the sector remains well established as the market's strongest momentum area.

Information Technology (XIJ) also remains firmly positioned in Leading. However, its trajectory continues to point downward, indicating that relative momentum is beginning to moderate. Despite remaining a clear leader, sustained downward movement could increase the risk of a future rotation toward Weakening.

Materials (XMJ) maintains a strong relative position within Leading. Its trajectory remains constructive, supporting continued positive momentum and keeping the sector among the market's principal leaders.

Resources (XJR) is also positioned within Leading, with its trajectory moving upward and to the right. This indicates strengthening relative momentum and suggests that the sector remains well supported within the current Leadership group.

Utilities (XUJ) continues to hold a Leading position and maintains a positive trajectory. Its movement indicates that the sector has strengthened its relative momentum and remains an important contributor to the market's leadership structure.

Energy (XEJ) is also positioned in Leading, although it sits considerably closer to the centre of the RRG than the other leading sectors. This indicates a less established relative position and makes its future trajectory particularly important. Continued movement toward the upper-right would strengthen its leadership status, while a rotation back toward the centre could signal fading momentum.

Overall, the six sectors in Leading demonstrate that positive relative momentum remains concentrated within a relatively small group. Health Care remains the strongest position, while Materials, Resources and Utilities display constructive trajectories. Information Technology requires closer monitoring because of its downward rotation, while Energy remains closer to the centre of the RRG.

Lagging Quadrant

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

Financials (XFJ) remains the deepest position within the Lagging quadrant, indicating particularly weak relative momentum compared with the broader ASX sector universe.

Consumer Discretionary (XDJ) and Real Estate (XPJ) also remain well below the RRG midlines, confirming weaker relative momentum. Communication Services (XTJ), Consumer Staples (XSJ) and Industrials (XNJ) are similarly positioned in Lagging.

The key issue is that none of these six sectors has crossed into Improving. Until their trajectories demonstrate sustained movement toward the centre of the RRG, there is limited evidence of a meaningful momentum recovery.

The concentration of six sectors in Lagging therefore continues to highlight the narrow distribution of positive momentum across the market.

Strategic Summary

The latest RRG shows that ASX sector momentum remains concentrated, with six sectors positioned in Leading and six in Lagging. No sectors are currently in either Improving or Weakening. ASX sector momentum remains concentrated, with Health Care, Information Technology, Materials, Resources, Utilities and Energy in Leading, while six sectors remain in Lagging. Health Care remains the strongest sector, although Information Technology's downward trajectory warrants monitoring. Energy has moved into Leading, while the absence of sectors in Improving suggests that momentum has yet to broaden meaningfully across the market.

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