Sector Rotation (NSE)

Find where relative strength is building and where it is fading, then fish for setups in the strongest groups. This is a context filter: it tells you which pond, not which fish or when.

1. Run it

python3 scripts/sectors.py rotation                       # Yahoo (pip install yfinance), default universe
python3 scripts/sectors.py rotation --csv-dir nse_idx/    # offline: one CSV per index + "NIFTY 50.csv"
python3 scripts/sectors.py rrg --sectors IT,BANK,METAL,PSUBANK --tail 10   # weekly trail, for plotting
python3 scripts/sectors.py breadth --members members.csv --csv-dir stocks/
python3 scripts/sectors.py universe                       # tickers and Yahoo coverage

--json gives raw output. Options: --weeks 8 (quadrant-change look-back), --smooth 3 --window 10 --momentum 4 (RRG settings, weeks), --period 2y, --ticker NAME=TICKER / --map file.json to override or add tickers (--ticker NIFTY=^CRSLDX benchmarks against NIFTY 500).

Offline CSVs: download each index from niftyindices.com (Historical Data, price index). Name each file after the index ("NIFTY IT.csv", "NIFTY PSU BANK.csv"); names are matched to keys automatically. Only a date and a close column are needed. Open/High/Low, "Shares Traded" and "Turnover" are ignored, and no volume is required. Dates like 30 Oct 2026, 30-Oct-2026 or ISO all parse. Daily data is best; weekly closes also work (DMAs become 10/40-week averages).

Yahoo coverage (probed 2026-10-31). History available: ^NSEI, ^NSEBANK, ^CNXIT, ^CNXAUTO, ^CNXPHARMA, ^CNXFMCG, ^CNXMETAL, ^CNXREALTY, ^CNXENERGY, ^CNXPSUBANK, ^CNXINFRA, ^CNXPSE, ^CNXCONSUM, ^CNXMNC, NIFTY_FIN_SERVICE.NS, NIFTYMIDCAP150.NS, NIFTYSMLCAP250.NS. Quote only, no history: NIFTY MEDIA, PRIVATE BANK, HEALTHCARE, OIL & GAS, CPSE, INDIA DEFENCE, CAPITAL MARKETS, MIDCAP 100 and SMALLCAP 100. Supply these as CSVs. Run universe for the full map.

2. What it measures

Metric	Definition
Returns	1W/1M/3M/6M/12M = 5/21/63/126/252 sessions; rel = (1+sector)/(1+NIFTY) − 1
RS line	100 × sector ÷ NIFTY, sampled at each week's last close
RS-Ratio	100 × EMA3(RS) ÷ SMA10 of that EMA. Above 100 = relative trend above its 10-week norm
RS-Momentum	100 × RS-Ratio now ÷ RS-Ratio 4 weeks ago. Above 100 = relative trend improving
Quadrant	Leading (≥100/≥100) → Weakening (≥100/<100) → Lagging (<100/<100) → Improving (<100/≥100)
Trend	Uptrend, Downtrend, Recovering (above a falling 50 DMA), Pullback (below a rising one), Mixed
Rank	(RS-Ratio − 100) + (RS-Momentum − 100)

Both axes are percentages and are not volatility-scaled, so REALTY and PSU BANK swing wider than FMCG. Compare quadrant, direction and weeks in quadrant, not raw distance. Rotation usually runs clockwise. A diagonal jump (Leading straight to Lagging) is a whipsaw near the centre. That was about 9% of quadrant changes on 10 years of NSE data; wait a second week before trusting it.

Reading it: Improving with a rising RS-Ratio is the early long watch-list. Leading plus an Uptrend is where breakouts follow through. Weakening means tighten trails and stop adding. Lagging plus a Downtrend is a short or avoid list. A sector that is only Improving but still below its 200 DMA is a bounce until its price trend confirms.

3. Rotation read (India)

• Cyclical / domestic beta: METAL, REALTY, PSU BANK, AUTO, INFRA. Their earnings ride credit growth, government capex, commodity prices and rate cuts.
• Defensive: IT, PHARMA, HEALTHCARE, FMCG. IT and pharma are dollar earners that gain when the rupee weakens, and they often hold up when FIIs sell India. FMCG has steady staples demand. IT is defensive only versus the Indian cycle: it still tracks US tech spending.
• Kept out of the tilt: BANK, FIN SERVICE and PVT BANK. These heavyweights are about a third of NIFTY and largely are the benchmark. ENERGY and OIL & GAS track crude. PSE, CPSE, DEFENCE, CAPITAL MARKETS, CONSUMPTION, MNC and MEDIA are reported as themes.
• Tilt: cyclicals' average RS-Ratio minus the defensives'. Above +0.5, with the 3M relative return agreeing, the read is risk-on. Below −0.5 it is defensive. Anything else is mixed.
• Size factor: MIDCAP 150/SMALLCAP 250 vs NIFTY. Both outperforming means broadening, which is healthy retail and DII risk appetite. Both lagging means narrowing into large caps, which often precedes or accompanies corrections. Smallcaps rolling over first is an early warning.

Driver	Sectors to check	Typical read
FII flows (NSDL fortnightly data)	BANK, FIN SERVICE, IT	FII buying lifts private banks first; persistent selling drags them while DII-held mid/small caps hold up
Rupee (USD/INR)	IT, PHARMA vs importers	Weak rupee helps exporters' margins and hurts OMCs and capital-goods importers
Crude (Brent)	OIL & GAS, ENERGY, paints, tyres, aviation	Falling crude helps OMCs (BPCL, HPCL, IOC), paints and tyres; rising crude helps upstream (ONGC, Oil India)
Monsoon and rural demand (IMD, Jun–Sep)	FMCG, AUTO (tractors, 2-wheelers)	A good monsoon helps rural volumes; watch the Sep–Nov festive season
Union Budget (1 Feb) and capex	PSE, CPSE, INFRA, DEFENCE, PSU BANK	Capex or divestment themes run into the Budget and can fade after it
RBI rate cycle (MPC)	BANK, REALTY, AUTO, NBFCs (FIN SERVICE)	Cuts help realty, auto and NBFCs; banks' margins can compress early in a cutting cycle
Global metals and China	METAL	LME prices, China stimulus and steel safeguard duties

4. Breadth inside a sector

breadth reports the percentage of members above their 50 and 200 DMA. --members takes a CSV of sector,symbol, and --csv-dir holds one CSV per stock. Create the stock CSVs with ../technical-analysis/scripts/ta.py fetch --symbol TCS --out stocks/TCS.csv. Membership comes from the index factsheet on niftyindices.com. An index Leading on fewer than 50% of members above their 50 DMA is being carried by one or two heavyweights, so its leadership is narrow.

5. How other skills use this

• market-pulse: fill the "Sectors" line with Leading/Improving vs Lagging, the tilt and the size read from rotation, instead of ranking 1-week returns by hand. Suggested wording there: "Sectors: run sector-rotation; quote quadrant leaders, tilt and size factor".
• india-market-analyst: at the Context stage, look up the stock's sector quadrant. Prefer longs in Leading or Improving sectors that are in an Uptrend. Flag a long in a Lagging, Downtrend sector as swimming against the tide. Then hand off to technical-analysis for the stock (and multi-timeframe-analysis on the sector index itself).

Caveats

• NSE reconstitutes sector indices semi-annually and changes weights through capping. Very long RS histories mix different baskets. Concentrated indices (NIFTY IT, BANK, METAL) can turn on one stock.
• Yahoo has gaps and late bars for some indices. The script warns when an index ends more than 3 days before NIFTY, or when the data is stale. Prefer niftyindices.com CSVs for anything you act on.
• A mid-week run treats the partial week as the latest weekly point. Re-check after Friday's close.
• Price indices exclude dividends, so high-yield PSE and energy look slightly weaker than their total return. Relative strength is not absolute: a Leading sector in a falling market can still lose money.

Output

Sector rotation vs NIFTY 50: data to [date] ([source])
Leading: .. | Improving: .. | Weakening: .. | Lagging: ..
Tilt: [Risk-on/Defensive/Mixed]: [spread] | Size: [Broadening/Narrowing/Mixed]
Key changes ([N] weeks): [sector from→to (week)]
Watch-list: [Improving + rising RS-Ratio] | Avoid: [Lagging + Downtrend]
Drivers to verify: [FII flows / USD-INR / crude / RBI / Budget, with sources]

Educational analysis, not investment advice. Data: [sources + timestamps].