Guide

Sector rotation

Sector rotation is money moving between groups of stocks. Learn what it looks like on a relative rotation graph for India, the US, and crypto.

Sector rotation is the habit of money to leave one group of stocks and show up in another. Banks can lead for a few months while IT fades, then the order flips. The companies inside a sector still differ, but the group often moves together because the same rates, the same currency, or the same spending cycle hits all of them.

A price chart of one sector does not show this cleanly. A sector can rise while lagging the market, or fall while still holding up better than everything else. Rotation is a relative idea. You need the sector and a benchmark in the same picture.

On Rotate the benchmark is the NIFTY 50 for India, the S&P 500 for US market sectors, and Bitcoin for crypto. Each line is that group's price divided by the benchmark. The relative rotation graph then asks two questions: is the group stronger than the benchmark, and is that strength speeding up or slowing down?

Names usually travel in a loop: improving, then leading, then weakening, then lagging, then improving again. The loop is a description of how relative trends age. It is not a promise that every sector completes it, and it is not a signal to buy the name in the leading quadrant.

If you want the steps rather than the definition, read how to analyze sector rotation. For the Indian groups, see Nifty sector rotation. For the US groups, see US market sectors.