Key Momentum Shifts

  • Technology Remains Leading: Information Technology (XLK) remains the only sector in the Leading quadrant, although its latest trajectory has turned lower after reaching a relatively strong position.
  • Industrials Remain Improving: Industrials (XLI) continues to occupy Improving, indicating strengthening relative momentum despite remaining outside Leading.
  • Health Care Moves Into Improving: Health Care (XLV) is positioned above the horizontal midpoint and has strengthened sufficiently to sit in Improving.
  • Communication Services Enters Weakening: Communication Services (XLC) remains just below the horizontal midpoint, placing it in Weakening.
  • Energy Enters Lagging: Energy (XLE) has moved below the horizontal axis and is now classified in Lagging, indicating weaker relative momentum.
  • Six Other Sectors Remain Lagging: Consumer Staples, Consumer Discretionary, Real Estate, Materials, Utilities and Financials remain in the Lagging quadrant.
  • Technology Declines Daily: XLK fell 0.89% on 28 September, although its relative position remains within Leading.
  • Health Care Shows Resilience: XLV gained 0.33%, the strongest daily performance among the eleven sectors.
  • Momentum Divergence: The RRG continues to show a substantial difference between daily performance and broader relative momentum across several sectors.

The latest Relative Rotation Graph for 28 September 2026 shows a concentrated momentum structure across US sectors. Technology is the only sector positioned in Leading, while Industrials and Health Care occupy Improving. Communication Services is positioned in Weakening, while Energy has now moved into Lagging. The remaining six sectors are also positioned in Lagging. The attached reference article uses the same RRG-based framework, separating sectors according to Leading, Improving, Weakening and Lagging quadrants.

The chart highlights that daily sector performance does not necessarily correspond with broader relative momentum. Health Care gained 0.33% and moved into Improving, while Energy gained 0.10% on the day but remains in Lagging. Similarly, Financials declined 1.19% while remaining in Lagging, demonstrating that the RRG reflects a broader momentum relationship rather than a single-session performance measure.

Momentum Breakdown by Quadrant

US Sector Relative Momentum Chart at the closing price of 28/09/2026. Powered by: amibroker.com.

Leading Quadrant

Information Technology (XLK) remains the only sector positioned in the Leading quadrant. Its location in the upper-right portion of the RRG indicates relatively strong momentum and relative strength compared with the broader market.

XLK declined 0.89% on 28 September, but the daily decline has not yet displaced the sector from its Leading position. The trajectory shown on the chart, however, has turned lower after reaching a considerably stronger position within the quadrant. This indicates that Technology remains relatively strong but its momentum is showing signs of moderation.

A continued downward movement toward the horizontal or vertical midpoint would indicate further deterioration in relative momentum. Conversely, a renewed upward trajectory would reinforce XLK's position within Leading.

Improving Quadrant

Industrials (XLI) and Health Care (XLV) are positioned in the Improving quadrant. Their locations above the horizontal midpoint but to the left of the vertical axis indicate improving momentum while relative strength remains below the Leading area.

Industrials declined 0.97% on 28 September, yet its longer trajectory remains within Improving. This highlights the difference between short-term performance and the broader relative-momentum structure captured by the RRG.

Health Care provides a notable development. XLV gained 0.33%, the strongest daily performance among the eleven sectors, and its latest position has moved above the horizontal midpoint. The move into Improving indicates that relative momentum has strengthened compared with its previous position in Lagging.

Continued upward movement toward the centre and subsequently toward the right would provide stronger evidence of improving relative strength for both sectors.

Weakening Quadrant

Communication Services (XLC) is positioned in the Weakening quadrant. The sector sits to the right of the vertical axis but below the horizontal midpoint, indicating that relative strength remains comparatively firm while momentum has weakened.

XLC declined 1.58% on 28 September, recording the weakest daily performance among the eleven sectors. Its position close to the centre of the RRG means further downward movement could increase the risk of a transition into Lagging.

A recovery above the horizontal midpoint would indicate renewed momentum, while continued movement downward and toward the vertical axis would signal further deterioration.

Lagging Quadrant

Energy (XLE), Consumer Staples (XLP), Consumer Discretionary (XLY), Real Estate (XLRE), Materials (XLB), Utilities (XLU) and Financials (XLF) remain in Lagging.

Energy is the most notable change in this group. XLE has moved below the horizontal axis and is now classified in Lagging. Although Energy gained 0.10% on 28 September, the RRG position indicates that its broader relative momentum remains weak.

The other sectors also remain in the lower-left quadrant. Consumer Staples gained 0.27%, while Financials declined 1.19%. Real Estate, Utilities and Materials also recorded declines, while Consumer Discretionary fell 1.41%.

The continued presence of seven sectors in Lagging indicates that relative momentum remains concentrated in only a small number of market segments. A sustained upward movement toward the centre of the RRG would be required before these sectors could transition into Improving.

Bottom Line

The 28 September 2026 US sector Relative Rotation Graph shows a concentrated momentum structure. Technology remains the only sector in Leading, while Industrials and Health Care are positioned in Improving. Communication Services is in Weakening, while Energy has now moved into Lagging alongside six other sectors.

Technology's Leading position remains supported by its relatively strong position on the RRG, although its latest trajectory has turned lower. Industrials continue to improve despite a weaker daily performance, while Health Care has made a notable transition into Improving.

Communication Services remains vulnerable to further deterioration, while Energy has crossed into Lagging despite recording a small daily gain. Meanwhile, Financials, Consumer Staples, Consumer Discretionary, Real Estate, Materials and Utilities continue to exhibit weak relative momentum.

Overall, the RRG indicates that Technology remains the principal area of relative strength, while Industrials and Health Care are showing improving momentum. The key developments to monitor are whether XLK can maintain its Leading position, whether XLI and XLV continue moving toward the centre and Leading quadrant, and whether XLC deteriorates further or XLE begins to recover from its new Lagging position.