ASX Sector Momentum Update: Six Sectors Remain in Leading

Robert Luong

27 August 2026 09:54 AM AEST

ASX Sector Momentum Update: Six Sectors Remain in Leading

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Key Momentum Shifts

Six Sectors Remain in Leading: Health Care (XHJ), Utilities (XUJ), Energy (XEJ), Resources (XJR), Materials (XMJ) and Information Technology (XIJ) remain in the Leading quadrant.
Health Care Maintains Leadership: XHJ remains the strongest-positioned sector, located furthest into the upper-right area of the RRG.
Utilities Shows Strong Momentum: XUJ remains firmly positioned in Leading, supported by strong relative strength and momentum.
Energy Remains Constructive: XEJ continues to hold a Leading position, although its proximity to the centre warrants monitoring.
Six Sectors Remain in Lagging: Consumer Discretionary (XDJ), Communication Services (XTJ), Consumer Staples (XSJ), Industrials (XNJ), Financials (XFJ) and Real Estate (XPJ) remain in Lagging.

The latest Relative Rotation Graph for 26 August 2026 shows a polarised momentum structure across the Australian Equity market. Six sectors remain in Leading while six remain in Lagging, with no sectors currently positioned in either the Improving or Weakening quadrant. The configuration indicates that relative momentum remains strong among established leaders but has yet to broaden across the wider sector universe.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 26/08/2026). Powered by: amibroker.com.

Leading Quadrant

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

Health Care (XHJ) maintains the strongest relative momentum within the group. Its position deep in the upper-right area of the RRG indicates strong relative strength and momentum, keeping it as the most established sector leader.

Utilities (XUJ) also remains firmly in Leading and is positioned well into the upper-right quadrant. Its current location indicates sustained relative strength, although its trajectory should be monitored for any movement toward the centre.

Energy (XEJ) remains in Leading with a constructive position above the horizontal midline. However, its closer proximity to the centre compared with Health Care and Utilities suggests that its Leadership is less established. Further movement toward the upper-right would strengthen its momentum profile.

Resources (XJR) and Materials (XMJ) continue to occupy the Leading quadrant. Both sectors remain above the key RRG midlines, indicating positive relative momentum. Their trajectories will be important in determining whether their leadership strengthens or begins to moderate.

Information Technology (XIJ) remains in Leading but has moved closer to the centre than the strongest sectors. Its downward trajectory suggests that relative momentum is moderating. Continued movement toward the centre could increase the risk of a future rotation into Weakening.

Improving Quadrant

No sectors are currently positioned in the Improving quadrant.

This represents a change from the previous RRG structure, where Communication Services (XTJ) had moved into Improving. Its latest position has now moved back below the horizontal midline, leaving the Improving quadrant without any sectors.

The absence of sectors in Improving suggests that there are currently no clear emerging recovery candidates among the weaker-performing sectors. A move by any Lagging sector above the horizontal midline would provide an early indication of improving relative momentum.

Lagging Quadrant

Consumer Discretionary (XDJ), Communication Services (XTJ), Consumer Staples (XSJ), Industrials (XNJ), Financials (XFJ) and Real Estate (XPJ) remain in the Lagging quadrant.

Financials (XFJ) continues to occupy one of the weakest positions within the group, indicating particularly weak relative momentum compared with the broader ASX sector universe.

Consumer Discretionary (XDJ), Communication Services (XTJ), Consumer Staples (XSJ), Industrials (XNJ) and Real Estate (XPJ) also remain below the key RRG midlines. Their current positions indicate that relative momentum has not yet recovered sufficiently to move into Improving.

The concentration of six sectors in Lagging highlights that the strength of the ASX sector market remains selective rather than broad-based. A sustained rotation by these sectors toward the centre and subsequently into Improving would be required to confirm a broader improvement in market momentum.

Strategic Summary

The latest RRG shows six sectors in Leading and six in Lagging, with no sectors currently positioned in Improving or Weakening. Health Care remains the strongest relative momentum sector, while Utilities, Energy, Resources, Materials and Information Technology continue to provide leadership.

The main area to monitor is the trajectory of Information Technology, which remains a leader but is moving closer to the centre. Energy is also relatively close to the centre, making its future direction important for determining whether its leadership strengthens or fades.

Overall, the momentum structure remains constructive but highly concentrated. Health Care, Utilities, Energy, Resources, Materials and Information Technology continue to lead the ASX sector universe, while the six sectors in Lagging need to demonstrate sustained improvement before market momentum can be considered more broadly distributed.

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