How to read the Relative Performance Rotation Graph
The Relative Performance Rotation Graph (RPRG) answers one question: compared with the market, which sectors or stocks are getting stronger, and which are getting weaker — and is that change speeding up or slowing down?
It shows nothing about price levels, targets or entries. It is a way of seeing rotation — money moving from one part of the market to another — in a single picture instead of thirty charts.
This is a guide to reading it. The tool is being finished and will live at tools.trading-sparks.com/rprg — there is a sample of it there now. The sector view will be free; the full universe, history and larger graphs will be in Pro.
First, three words you'll keep seeing
| Word | What it means |
|---|---|
| Benchmark | The index everything is compared against — Nifty 50 by default. The graph never shows whether a stock went up; it shows whether it did better or worse than this. |
| Relative strength (RS) | Price of the thing divided by price of the benchmark. If RS rises, the thing is beating the benchmark, even if both are falling. |
| Tail | The last few positions of a symbol, joined into a line. It shows the direction of travel, not just where something sits today. |
The 30-second read
- Which quadrant is it in? Top-right is good, bottom-left is bad, the other two are transitions.
- Which way is the tail pointing? Movement matters more than position. A symbol sliding out of the top-right is a different story from one sliding into it.
- How long is the tail? A long tail means a fast move; a tight cluster near the centre means nothing much is happening.
Everything below explains why.
The two axes
Every dot is one symbol — a sector index, a sub-sector, a stock or a future. Its position comes from two numbers, both normalised so that 100 is "same as the benchmark".
RS-Ratio (across)
How strong the symbol is relative to the benchmark, smoothed. Above 100: it has been outperforming over the calculation window. Below 100: underperforming. The further from 100, the larger the gap.
RS-Momentum (up)
How fast that relative strength is changing. Above 100: the symbol's relative strength is rising — it is gaining ground. Below 100: it is losing ground, even if it is still ahead.
Ratio is where you are; momentum is where you are going.
Both are built the same way, and it is worth knowing because it explains their behaviour: relative strength is divided by its own weighted moving average, then smoothed again by the same length. The result hovers around 100 and reacts to changes in trend rather than to the level of price. The calculation length (default 20 bars daily, 5 weekly) sets how much history each reading remembers.
The four quadrants
The dashed lines at 100 divide the graph into four regions. Symbols tend to travel through them clockwise — not always, and not neatly, but often enough that the pattern is the point of the tool.
Outperforming — top-right. Strong relative strength and rising. The leaders. This is where trends are already established; it is the most comfortable quadrant and the one where the move is most advanced.
Losing — bottom-right. Still ahead of the benchmark, but momentum has turned down. Leadership fading. Symbols here have not fallen behind yet; they have stopped pulling away.
Underperforming — bottom-left. Behind the benchmark and getting further behind. The laggards. Trends here are also established — just in the wrong direction.
Gaining — top-left. Still behind the benchmark, but momentum has turned up. This is where recoveries begin, and where the least-noticed opportunities usually sit — as well as the false starts.
The usual cycle is Gaining → Outperforming → Losing → Underperforming → Gaining. A symbol that skips a quadrant, or reverses, is telling you something changed abruptly.
Reading a tail
The tail is the last N readings (tail length, default 10 daily, 5 weekly), oldest to newest, ending at the dot. The colour is the quadrant the dot is in now.
- Long and straight — a decisive move. Rotation is happening quickly.
- Short or coiled — indecision, or a symbol that tracks the benchmark closely.
- Pointing toward the centre — the relative trend is weakening, whatever quadrant it is in.
- Pointing away from the centre — the relative trend is strengthening.
- Curving — momentum turning before ratio does. The curve usually shows up a few bars before a quadrant change.
Turn tails off if the graph is crowded; the dots alone still show position.
The controls
Timeframe. Daily uses daily bars and reads the last few weeks of rotation. Weekly aggregates to weeks and reads months. Switching resets the two lengths to sensible defaults (20/10 daily, 5/5 weekly). Weekly is the calmer of the two and the better place to start.
Benchmark. Nifty 50, 100, 200, 500, Next 50, Bank, or Total Market. Changing it changes every position: a bank stock measured against Nifty Bank is a different question from the same stock measured against Nifty 50.
Universe. Sectoral indices — the fourteen Nifty sector indices, the best first view. Sub-sectors — 106 finer groups (Agri – Rice, Auto – Tyres, IT – Services …), optionally one group at a time. Stocks — sliced by major index, sector index or sub-sector, or picked by name. Futures — the F&O list.
Quadrants to show. Filter to, say, only Gaining to see candidates for recovery, or only Losing to see where leadership is fading. The graph re-scales to what is shown.
Date for analysis. The graph as it stood at the close of any past date — useful for checking how a rotation looked before the move you now know about.
Calculation length. Shorter is more responsive and noisier; longer is smoother and later. The default is a reasonable middle. If you change it, change it for a reason and keep it.
Tail length. How many readings to draw. Purely visual; it does not change the numbers.
The animated graph
The second graph replays the last 21 daily (or 14 weekly) readings as a sliding window. Press play, or drag the date. It is the quickest way to see whether a cluster of symbols is rotating together — sector rotation is a group behaviour, and the animation makes the group visible in a way the static graph cannot.
Symbols with too little history for the window are listed under the graph rather than drawn.
The table
Every symbol on the graph, with its current numbers.
| Column | What it is |
|---|---|
| Ratio / Momentum | The two coordinates, as drawn. |
| Direction | Which way the symbol moved on its last step, as a compass point. North is momentum improving; East is ratio improving; North East is both. |
| Angle | The same move as degrees, 0° = due east, counter-clockwise. Useful for sorting. |
| Liquidity (stocks and futures, Pro) | Average price × average volume over the last 21 days (5 weeks on Weekly). A rough measure of how much money trades in it daily — a strong rotation in something illiquid is a different proposition. |
| Quadrant | Where it sits now. Rows are tinted to match the graph. |
Click a column heading to sort.
Free and Pro
The free graph will cover the sectoral indices and NIFTY 500 stocks, up to 15 symbols at a time, on the latest close. That is enough to read sector rotation every day.
Pro will add sub-sectors and futures, the full stock list sliced any way you like, any date in history, up to 500 symbols on one graph (Select All on NIFTY 500), and the liquidity column. It will be a prepaid period, not a subscription. Both open together when the tool goes live.
Five mistakes worth avoiding
- Reading position without direction. A symbol in Outperforming with a tail pointing at the centre is on its way out. The quadrant tells you less than the tail.
- Confusing relative with absolute. Outperforming in a falling market means falling less. The graph never says whether anything went up.
- Changing the benchmark and comparing readings. Positions are only comparable against the same benchmark, on the same timeframe, with the same lengths.
- Chasing the far corners. The symbol furthest into Outperforming has already made its move. Rotation is caught at the turns — in Gaining, or leaving Losing — not at the extremes.
- Reading one day. A single reading is noise. The tail and the animation exist so you don't have to.
What this is not
There are no buy or sell signals here. RS-Ratio and RS-Momentum describe past relative performance; they say nothing about what happens next. It is a way of seeing where money has been moving so you can form your own view faster.
Markets carry substantial risk of loss. Past and backtested performance is no guarantee of future results. Trading-Sparks provides research, education and tools only — not financial advice, personal recommendations, or any guarantee of profit.
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