Sector rotation is market leadership moving from one group of stocks to another: banks lead for a while, then technology, then energy. Ranking sectors on the same measures, and watching the ranking change, shows where strength is building and where it is fading.
Why does leadership rotate?
Sectors respond to different things: interest rates, commodity prices, demand and regulation. As those change, money moves between sectors. A rotation often shows first as a change in direction, before a group reaches the top of the table.
How does Chart in Motion rank sectors?
The Sector insights panel ranks the sectors, or industries, of the India and USA lists. Each group has:
- Technical: a price-trend score from 0 to 100. It adds 3 equal parts: whether the 20-, 50- and 200-day averages are stacked in an uptrend, where price sits in its 52-week range, and the 3- and 12-month Information Ratio (IR) ranks. Larger companies count for more. 70 or higher shows in green; under 40 in red.
- 1M: how much the technical score changed over the past month, against how much it usually moves in a month. +2.0σ means it rose twice its usual monthly swing. Between −1σ and +1σ is ordinary and shows in grey.
- Today: the middle stock’s price change today.
- IR3 and IR12: the middle stock’s 3- and 12-month IR rank, from 0 to 100. The IR guide explains them.
By default the panel lists the strongest 10 and the weakest 3 by technical score; Show all lists every group, and every column header sorts. A group needs at least 2 stocks in the list.
Each group is also rated Outperforming, Neutral or Underperforming. That compares the list’s groups on an overall score, half technical and half fundamental (estimate revisions, profit and sales trends, and PEG). The top 25% are Outperforming, the next 35% Neutral and the bottom 40% Underperforming. The Sector performance filter can show just 1 or 2 of these.
On your own lists, the panel uses only your stocks. It shows Today, IR3 and IR12, and ranks groups by the middle stock’s IR12.
A made-up example
| Sector | Technical | 1M | IR12 |
|---|---|---|---|
| Sector A | 78 | −1.6σ | 72 |
| Sector B | 55 | +2.1σ | 48 |
| Sector C | 31 | −0.4σ | 22 |
Sector A still ranks first, but its score fell far more than usual this month. Sector B sits in the middle, yet it rose more than twice its usual swing. Sector C is weak and little changed. If B keeps climbing while A slips, leadership is moving from A to B.
How can you spot a rotation?
- Read rank and 1M together: a mid-table group with a strong positive 1M is gaining; a leader with a negative 1M is losing strength.
- Switch to Industries: a sector’s score can hide 1 industry rising while another falls.
- Check breadth: the Breadth panel’s sector indices show whether most of a sector’s stocks are joining the move.
- Look over weeks, not days: 1 day’s move is noise. A rotation shows over weeks and months.
What are the limits?
- The scores look back. A strong group can turn without warning.
- The rows are rebuilt once a day; Today moves during the session.
- Small groups swing more: in a 3-stock industry, 1 stock moves the middle value a lot.
- A ranking is not a forecast, and Chart in Motion does not make buy, sell or hold calls.
See it in the app
Open Market scans and choose Sectors (Sector strength on a phone). Pick India or USA, then Sectors or Industries. On desktop, clicking a group shows only its stocks in your watchlist; on a phone, tapping a group opens its stocks. The panel is in every plan, including Free. Your own lists need Pro or Pro+. More on the features page.