How to Read a Sector Rotation Chart

On a day when the Nifty barely moves, some sectors can be up sharply and others down just as hard. A single index number hides that. A sector rotation chart shows it: every sector on one picture, where it stands against the rest and which way it is heading.

The chart most people mean is a relative rotation graph, or RRG. It looks busy at first, but it is built from two simple questions.

The two questions an RRG answers

Every sector is one dot, placed by two numbers. Both are centred on 100, which means "no difference".

• Across: relative strength (RS-Ratio). How has this sector done lately compared with the benchmark? To the right of 100, it has done better; to the left, worse. On Ansaar's chart, 109 means the sector is 9% ahead of the average NSE sector over the last 21 trading days.
• Up: relative momentum (RS-Momentum). Is that comparison getting better or worse? Above 100, the sector's relative strength is improving; below 100, it is slipping. On Ansaar's chart, 103 means its relative strength is 3% better than it was five sessions ago.

The idea comes from Julius de Kempenaer, who developed Relative Rotation Graphs.

The four quadrants

Those two lines at 100 split the chart into four quadrants:

Sectors often travel clockwise through them over weeks: Improving, then Leading, then Weakening, then Lagging, and round again. That is a tendency, not a rule. A sector can turn back halfway or skip a quadrant.

How Ansaar's chart is built

Ansaar's sector rotation chart covers every NSE sector it tracks, around 58 of them on a normal day.

• The benchmark is the average NSE sector, not the Nifty 50. A rotation graph needs a benchmark measured over the same window as the sectors. The sector data covers 21 days and the Nifty history available covers a different window, so comparing the two would mix units. The average of all sectors on each date is a like-for-like benchmark: roughly how an equal-weighted basket of sectors performed.
• Across is the 21-day price change against that average. Up is how that comparison has changed over the last five sessions, one trading week. That is short enough to move week to week, and long enough that one noisy day cannot flip a sector across a line on its own.
• Each bubble's size is the number of stocks in the sector. A big bubble is a broad sector; a small one may be three or four companies.
• The same positions are listed as a table under the chart, so you can read exact numbers instead of squinting at dots.

A worked example: 18 September 2026

On 18 September 2026, across 58 NSE sectors, Telecom Equipment & Accessories had the strongest 21-day price change, +9.4%, and Cigarettes & Tobacco Products the weakest, −21.5%. The chart put 16 sectors in Leading, 14 in Weakening, 11 in Improving and 17 in Lagging.

The instructive one is tobacco. It was the weakest sector over 21 days, far to the left of the chart, yet it sat in the Improving quadrant, near the top of the momentum axis. That is not a contradiction. It means the sector was still well behind the average, but its relative strength had improved sharply over the previous week. The two axes answer different questions, and a sector can be weak on one and strong on the other at the same time.

Five common mistakes

1. Reading it as a forecast. The quadrants describe the last few weeks. Nothing on the chart says where a sector goes next.
2. Ignoring bubble size. A sector with three stocks can swing across the chart on one company's news. Broad sectors move more slowly and mean more.
3. Forgetting the benchmark. "Ahead" here means ahead of the average sector, not ahead of the Nifty 50 or of cash.
4. Judging one day's position alone. Compare with last week's chart. A sector drifting steadily towards Leading tells you more than one that jumped there overnight.
5. Treating a quadrant as a verdict on the companies. A sector can be Lagging while some of its companies do well, and the reverse.

Key takeaways

• A relative rotation graph places each sector on two axes centred on 100: relative strength across, relative momentum up.
• The quadrants are Leading, Weakening, Lagging and Improving, and sectors often, but not always, move clockwise through them.
• Ansaar's benchmark is the average NSE sector over 21 days, not the Nifty 50; momentum looks back five sessions.
• A sector can be the weakest over 21 days and still be Improving, because the axes answer different questions.
• The chart measures relative strength in the past. It is not a forecast.

Quick quiz

Check what you learned about rotation charts

1. A sector sits at 108 across and 97 up. Which quadrant is it in?

LeadingWeakeningLaggingImproving

2. What does the up-and-down axis of a relative rotation graph measure?

The sector's share priceHow many stocks the sector holdsWhether the sector's relative strength is improving or worseningThe sector's weight in the Nifty 50

3. On 18 September 2026, tobacco was the weakest sector over 21 days but sat in the Improving quadrant. How is that possible?

The chart had an errorIt was far behind the average but its relative strength had improved sharply over the past weekImproving means the sector is ahead of the averageTobacco is compared with the Nifty 50, not the average

Try it

Open the live sector rotation chart and find one sector in each quadrant. Then read What Is a Market Regime? to see how the whole market's mood fits around the sectors moving inside it.