Key Momentum Shifts

  • Information Technology, Materials and Real Estate Occupy the Leading Quadrant: Information Technology (XIJ), Materials (XMJ) and Real Estate (XJR) are positioned in Leading, indicating relatively strong momentum and relative strength.
  • Health Care Shows Strong Improvement: Health Care (XHJ) is positioned in Improving and recorded a strong 2.15% gain in the latest session, highlighting strengthening momentum.
  • Consumer Discretionary Remains Improving: Consumer Discretionary (XPJ) continues to sit in Improving, although its latest daily performance was slightly negative.
  • Energy and Financials Remain in Weakening: Energy (XEJ) and Financials (XFJ) remain in Weakening, indicating deteriorating relative momentum despite Energy recording the strongest daily gain of 3.91%.
  • Five Sectors Remain Lagging: Industrials (XNJ), Telecommunications (XTJ), Communication Services (XSJ), Consumer Staples (XDJ) and Utilities (XUJ) remain in Lagging, reflecting weaker relative momentum.
  • Sector Rotation Remains Selective: Three sectors occupy Leading, two are in Improving, five are Lagging and two remain in Weakening, indicating that Leadership has broadened but market momentum remains uneven.

The latest Relative Rotation Graph (RRG) for 11 August 2026 indicates that the Australian Equity market continues to experience selective rotation between sectors. Information Technology (XIJ), Materials (XMJ) and Real Estate (XJR) are positioned in the Leading quadrant, while Health Care (XHJ) and Consumer Discretionary (XPJ) are in Improving.

Meanwhile, Financials (XFJ) and Energy (XEJ) remain in Weakening, while Industrials (XNJ), Telecommunications (XTJ), Communication Services (XSJ), Consumer Staples (XDJ) and Utilities (XUJ) remain in Lagging. The latest daily performance data adds an important distinction, with Energy gaining 3.91% and Health Care rising 2.15%, demonstrating that short-term price performance can differ significantly from broader relative momentum positioning. This distinction is consistent with the reference article's approach to interpreting RRG positioning alongside daily sector performance.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 11/08/2026). Powered by: amibroker.com.

Leading Quadrant

  • Information Technology (XIJ) is positioned in the Leading quadrant, indicating strong relative momentum and favourable positioning within the current sector rotation. However, the sector declined 0.83% in the latest session, highlighting the difference between short-term price performance and its broader momentum position.
  • Materials (XMJ) remains in Leading, supported by positive relative momentum and a 0.51% daily gain. Its position indicates that resource-related stocks continue to maintain a strong position within the broader sector rotation.
  • Real Estate (XJR) is also positioned in Leading, indicating sustained relative strength. The sector gained 1.03% in the latest session, reinforcing its position among the stronger areas of the Australian market.

The presence of Information Technology, Materials and Real Estate in Leading indicates that technology, resource and property-related sectors remain important sources of relative strength. The three sectors are currently the key areas of leadership on the RRG.

Improving Quadrant

  • Health Care (XHJ) is positioned in Improving, with its trajectory indicating strengthening relative momentum. The sector gained a strong 2.15% in the latest session, providing additional evidence of renewed buying interest.
  • Consumer Discretionary (XPJ) remains in Improving, suggesting that consumer-related stocks are experiencing an improvement in relative momentum. However, the sector declined modestly by 0.12% during the latest session.

The Improving quadrant is therefore an important area to monitor, particularly Health Care. Its combination of a strong daily gain and Improving RRG position could indicate that the sector is building momentum toward the Leading quadrant.

Weakening Quadrant

  • Financials (XFJ) remains in the Weakening quadrant, indicating continued deterioration in relative momentum. The sector declined 0.35% in the latest session, adding to the evidence of relative weakness.
  • Energy (XEJ) also remains in Weakening, despite recording an exceptional 3.91% gain, the strongest daily performance among all 12 ASX sectors.

The positioning of Energy is particularly notable. Its strong one-day gain contrasts sharply with its Weakening RRG position, demonstrating that a significant short-term rally does not necessarily mean that broader relative momentum has already turned positive. A sustained improvement in its RRG trajectory would provide stronger confirmation of a broader recovery.

Financials also require monitoring, as a continued deterioration in relative momentum could keep the sector among the weaker areas of the Australian market.

Lagging Quadrant

  • Industrials (XNJ) remains in Lagging, with the sector declining 0.75% in the latest session and continuing to display relatively weak momentum.
  • Telecommunications (XTJ) remains in Lagging despite a relatively modest decline of 0.29%. Its current position suggests that broader relative momentum remains subdued.
  • Communication Services (XSJ) is also in Lagging and recorded the largest sector decline of 1.46%, reinforcing its weak relative position.
  • Consumer Staples (XDJ) remains in Lagging, although the sector posted a small gain of 0.22% in the latest session.
  • Utilities (XUJ) remains in Lagging despite gaining 0.98%, indicating that its broader relative momentum remains weaker than its recent short-term price performance suggests.

The Lagging classification indicates that sustained improvement would be required before these sectors can rotate into Improving and establish stronger relative momentum.

Strategic Summary

The latest Relative Rotation Graph highlights a selective but potentially broadening rotation across the Australian equity market. Information Technology (XIJ), Materials (XMJ) and Real Estate (XJR) occupy the Leading quadrant, making them the primary sources of relative strength.

At the same time, Health Care (XHJ) and Consumer Discretionary (XPJ) are positioned in Improving. Health Care is particularly notable because its 2.15% daily gain coincides with an Improving RRG position, potentially making it one of the more important sectors to watch for further momentum development.

However, Financials (XFJ) and Energy (XEJ) remain in Weakening, while five sectors—Industrials, Telecommunications, Communication Services, Consumer Staples and Utilities—remain in Lagging. The sharp divergence between Energy's 3.91% daily gain and its Weakening RRG position demonstrates why relative momentum analysis can provide a different perspective from a single-session performance ranking.

Overall, the RRG suggests that Information Technology, Materials and Real Estate currently provide the strongest relative leadership, while Health Care is emerging as the most notable Improving sector. A continued rotation of Health Care and Consumer Discretionary toward Leading would provide stronger evidence that market leadership is broadening. At the same time, a recovery in Energy and Financials would be important for reducing the current divergence between short-term performance and broader relative momentum.