Sector Rotation

Sector rotation describes how market leadership moves from one sector to another over time. It helps identify sectors that are outperforming, losing strength, recovering, or moving into weaker conditions.

Relative Rotation Graph (RRG)

RRG is a visual framework used to compare sectors against a common benchmark. It shows both the sector's relative strength and the direction of its relative momentum, making changes in market leadership easier to compare across sectors.

RS-Ratio

RS-Ratio represents the sector's current relative strength compared with the benchmark.

It answers: “How strong is this sector relative to the broader market?” The neutral reference level is 100.

• Above 100 → relatively stronger than the benchmark.
• Below 100 → relatively weaker than the benchmark.
• Around 100 → relatively neutral.

RS-Ratio describes the sector's current relative condition; it does not by itself tell you whether that condition is improving or deteriorating. RS-Momentum provides that directional context.

RS-Momentum

RS-Momentum describes the direction of the sector's relative-strength condition.

It answers: “Is the sector's relative performance improving or weakening?” The neutral reference level is 100.

• Above 100 → positive relative momentum.
• Below 100 → negative relative momentum.
• Around 100 → relatively neutral momentum.

Quadrant

The Quadrant summarizes the sector's current relative-strength and momentum condition. The dashboard uses four quadrants:

• Leading — strong relative strength with positive momentum.
• Weakening — strength is beginning to lose momentum.
• Lagging — weak relative strength and negative momentum.
• Improving — momentum is recovering even though relative strength has not yet fully recovered.

Momentum Tail

The Momentum Tail shows the recent trajectory of the sector's RRG position. It helps users understand how the sector's relative condition has developed over recent observations. A tail moving consistently in one direction indicates sustained movement, while a bend or reversal may indicate that the sector's direction is changing. The current position tells you where the sector is now, while the tail provides context about where it has been moving.

EMA

EMA (Exponential Moving Average) gives greater importance to recent observations while gradually reducing the influence of older observations. This allows the dashboard's relative-strength and momentum analysis to remain responsive to changing market conditions while still retaining historical context. EMA is used as a smoothing and continuity mechanism rather than simply treating every observation with equal importance.

A/D Ratio

The A/D Ratio measures the breadth of participation within the sector. It compares advancing and declining constituent stocks to show whether the sector's movement is supported broadly across its members. Strong participation means a larger portion of the sector is contributing to the movement, while weaker participation may indicate that the movement is concentrated among a smaller number of stocks. This provides additional context when evaluating the sector's overall strength.

EMA Bandwidth (BW%)

EMA Bandwidth describes the sector's current volatility environment. It provides an indication of how widely prices are behaving around the EMA-based reference. Increasing bandwidth suggests that price dispersion and volatility are expanding, while decreasing bandwidth indicates a more compressed price environment. It is primarily used as contextual information and should not be interpreted independently as a bullish or bearish signal.

Session Performance

Session Performance shows how the sector has performed during the current trading session. It provides a direct view of the sector's current price movement and helps put its relative-strength condition into an intraday context. A positive session does not necessarily mean the sector is outperforming the benchmark, and a negative session does not automatically indicate weak relative strength. It is therefore best considered alongside the RRG position and other supporting metrics.

Composite Score

The Composite Score provides a consolidated comparison of sectors using relative strength, relative momentum, and participation. A higher score generally reflects a more favourable combination of these characteristics, while a lower score represents a weaker combination. It is primarily a ranking and comparison aid rather than an independent trading signal.

Benchmark

The benchmark is the common market reference against which a sector's relative performance is evaluated. RS-Ratio and RS-Momentum are interpreted in relation to this reference so that sector conditions can be compared on a consistent basis.

Neutral Level

The neutral level provides the reference point for interpreting relative strength and relative momentum. For both RS-Ratio and RS-Momentum, 100 is the neutral reference: positions above or below it help indicate stronger or weaker relative conditions and positive or negative relative momentum.

Intraday Updates

The dashboard updates its analytical view as new intraday market observations become available, allowing sector conditions and supporting metrics to change throughout the session. The resulting view is intended to reflect the latest available sector-relative conditions rather than a static end-of-day snapshot.