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Learn · Sector rotation, explained

Sector rotation, explained

Updated August 2026 · Educational analysis, not investment advice

Sector rotation is the tendency for market leadership to shift from one part of the market to another over time. Tracking which sectors are strengthening and weakening is a way to see where leadership is concentrated. WealthStar ranks sector strength and its rotation daily.

What sector rotation is

At any point, some sectors are leading the market and others are lagging. As conditions change, that leadership rotates — money and momentum move from, say, defensives toward cyclicals, or from one theme to another. Rotation is not a prediction; it is a description of where relative strength currently sits and how it is changing.

How to measure it

One clean way is to look at relative strength at the sector level — for example, the median RS of the stocks in each sector — and watch how those sector ranks change over time. A sector climbing the ranks is gaining leadership; one sliding down is losing it. WealthStar computes a strength score per sector and flags which are rising and falling.

How WealthStar shows it

The Sector Strength view ranks every sector by its median relative strength and marks the biggest movers since the prior session, so you can see where leadership is broadening or narrowing. It is descriptive market context — one lens on the tape, not a recommendation.

Frequently asked

What does sector rotation tell you?
It shows where market leadership currently sits and how it is shifting between sectors. It is descriptive context about the tape, not a forecast or a set of recommendations.
How do you track sector rotation?
A common method is measuring relative strength at the sector level (for example, median RS per sector) and watching how those ranks change over time.
Does sector rotation predict the market?
No. It describes present and past leadership. WealthStar presents it as one input for your own research.
Relative Strength explained →Sector Strength →

Educational analysis only. WealthStar shows descriptive data and classifications — not buy/sell calls, price targets, or investment advice, and it is not a SEBI-registered research analyst service. Do your own research.