Published on: September 17, 2024
Identifying and riding the right sector trend in trading is decisive for achieving superior returns. As market conditions fluctuate and sectors rise and fall in prominence, having the right tools and techniques to pinpoint emerging trends can give traders a significant edge.
Are you looking for the right tool to find these emerging sectors?
If yes, check out this tool—the Definedge Sector Matrix—available in RZone. This tool helps traders analyse and capitalise effectively on sectorial movements.
Here’s a comprehensive guide on how to leverage the Sector Matrix to identify the right sector trend.
What is the Sector Matrix?
The Sector Matrix is a simple tool developed by Definedge that is designed to offer traders a clear picture of sector performance.
You can check the sectorial trend offered by NSE or the Equal Weighted Sectorial indexes created by Definedge.
The Definedge Equal Weighted Sectorial Index covers 65 sectors and provides insights into which sectors are showing strength and which are lagging. The Equal Weighted Index approach ensures a balanced view by incorporating large-cap, mid-cap, and small-cap constituents, thus offering a holistic view of sector performance.
Step-by-Step Guide to Using the Sector Matrix
To utilize the Definedge Sector Matrix for identifying sector trends, follow these steps:
1. Login to RZone using your unique Client Code
2. From the Menu > Click on “Matrix: Price & RS” > Select “Sector Matrix”

3. Select the Group > NSE Sector or Definedge Sectors

You can select NSE Sectors or Definedge Sectors in the Sector Matrix interface.
For optimal results, choose the index under Script 2 that you believe will offer the best insights into sector outperformance and underperformance.
Since the Definedge Sectors are Equal Weighted Index, it includes a diverse range of stocks from large-cap to small-cap, it’s recommended to use the Nifty500 index. This index provides a comprehensive view by including constituents across various market capitalisations.
4. Click on “Scan”
The Sector Matrix will then process the data and generate a list of sectors based on their performance metrics. This list will help you identify which sectors outperform and underperform with the trend.
Example of Sector Analysis
To illustrate how the Sector Matrix can be used, let’s consider a snapshot of sector performance as of the closing of September 16, 2024:

By examining these performance indicators, traders can decide which sectors to invest in or avoid.
Key Benefits of Using the Sector Matrix
1. Balanced Perspective: The Equal Weighted Index ensures that no single market cap segment skews the results, providing a balanced view of sector performance.
2. Timely Insights: Regular updates and scans allow traders to stay current with the latest sector trends.
3. Actionable Data: Clear performance metrics help make strategic investment decisions, such as capitalising on emerging trends or avoiding sectors showing weakness.