How sector rotation and the RRG are computed
JdK-style RS-Ratio and RS-Momentum on weekly bars, versus the Nifty 50.
The sector pages use the official daily closes of NSE's sector indices. Each sector's relative strength against the Nifty 50 is placed on a Relative Rotation Graph (RRG):
- Relative strength = 100 × sector index ÷ Nifty 50, sampled weekly.
- RS-Ratio: that relative strength normalised against its own 26-week distribution and smoothed over four weeks, centred on 100. Above 100 means the sector is outperforming its own recent norm.
- RS-Momentum: the rate of change of RS-Ratio, normalised the same way. Above 100 means the outperformance is still building.
Quadrants: Leading (both above 100), Weakening (ratio above, momentum below), Lagging (both below), Improving (ratio below, momentum above). Sectors typically rotate clockwise through them. This reproduces the published construction of the JdK indicators; the exact vendor coefficients are proprietary, so treat the values as a consistent internal scale.
The sector leaderboard's RS score is the average percentile rank of each sector's 1, 3 and 6-month return relative to the Nifty 50. The backtested rotation strategy (top four of eleven deduplicated sector indices by 3-month return, rebalanced monthly, with a 200-day filter, after 20 bps of costs) is shown on the sector rotation page with its drawdowns.
