Sector Rotation Strategy on NSE: How
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
How Sector Rotation Boosts Swing Trading Success
Institutional capital constantly rotates from overvalued sectors to undervalued sectors. Understanding this rotation helps swing traders enter trends at their early stages.
What is Sector Rotation?
Sector rotation is an investment strategy that involves shifting capital out of stock market sectors that are peaking into sectors that are starting to show relative strength and momentum.
Phases of Sector Rotation on NSE
Sectors typically rotate through four stages aligned with business cycles:
- Early Bull Phase: Financials, Cyclicals, and Consumer Discretionary lead.
- Late Bull Phase: Energy, Industrials, and Materials peak.
- Early Bear Phase: Defensive sectors like IT and Pharma hold ground.
- Late Bear Phase: Staples and Utilities offer capital protection.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
Statutory Warning & Risk Disclaimer: Investment in securities market is subject to market risks. Read all related documents carefully before investing. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Content provided on this blog is for informational and educational purposes only.