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Nifty index rotation, measured against the market and against cash
Most rotation tools ask one question: is an index beating the market? This one asks two. Is it beating Nifty 500, and is it beating a liquid ETF (Exchange Traded Fund), the near risk-free return on cash? An index earns a place among the Leaders only if it clears the higher of the two hurdles. Thirty-five Nifty indices, updated after every trading day.
NSE is the National Stock Exchange of India. Relative strength (RS) compares an index with a benchmark; it rises when the index does better. Returns are price returns of the indices. Percentage points (pp) are the difference between two percentages.
What the data shows
Stocks or liquid ETF right now?
A market switch tested on six years of data. Stay in stocks while either Nifty 500 or Nifty Smallcap 250 has beaten the liquid ETF benchmark over the last 3 months. When both have returned less than cash, hold liquid ETF units instead (for example LIQUIDCASE, or any ETF that tracks the Nifty 1D Rate Index). Liquid ETF units keep earning the overnight rate every day, so the portfolio still grows while stocks are weak.
Week by week, oldest on the left:stocksliquid ETF
In our backtest of a 30-stock edge portfolio from January 2021 to October 2026, adding this switch raised the yearly return from about 19% to about 30% and cut the worst fall from −33% to −19%. The switch always uses 3-month returns, whatever period is chosen above. This is a rule tested on past data, not a recommendation to buy or sell, and past results do not indicate future returns.
The hurdle ladder
Each bar is one index’s return over the chosen period. The two lines are the hurdles: the market (Nifty 500) and cash (the liquid ETF benchmark). Only bars that reach past both lines are green.
Rotation map against the hurdle
Across: the edge, meaning the index’s return minus the higher hurdle. Right of the centre line, the index beats both the market and cash. Up and down: how the edge has changed over the last 4 weeks. Above the centre line, the edge is improving. The trail shows where each index has come from.
Rotation timeline
Each row is one index; each square is its group in one week, oldest on the left. The grey top row shows which hurdle was the higher one at the time: M when the market was beating cash, C when cash was beating the market.
The outlined square is the latest reading. Tap an index name anywhere on the page to open its charts below; on a computer, hover over a square to see that reading.
The four groups
Moved since last week
Market against cash, and how many indices clear the hurdle
Top: the market’s rolling return against the liquid ETF benchmark’s over the same period. Shaded stretches are when cash was ahead, so cash was the hurdle. Bottom: how many of the indices beat Nifty 500 (what a market-only relative strength tool counts) and how many beat both the market and cash.
Full table
Edge is the return over the chosen period minus the higher of the market’s and cash’s. “Clears both” shows, for 1 month, 3 months, 6 months and 1 year, whether the index beat both hurdles (filled dot). Returns use trading days (1 week = 5, 1 month = 21, 3 months = 63, 6 months = 126, 1 year = 252). Distance from the 52-week high is shaded amber at 10% or more below and red at 20% or more.
| Over 3 months | Price return | Trend | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Index | Type | Group | Hurdles beaten | Return | vs market | vs cash | Edge | Clears both | 1W | 1M | 3M | 6M | 1Y | From 52-week high | Vs 200-day average |
Index detail
Price and 200-day average, last 2 years
Against the market and against cash (1 year ago = 100)
Stocks inside the index
Once you know which index to watch, the next question is which of its stocks. Each stock faces three hurdles over the same period: its own index, the market (Nifty 500) and cash. A stock earns a place among the Leaders only if it beats the highest of the three, meaning it did better than simply buying the index, the whole market or a liquid ETF. Change the index with the selector in Index detail above, or tap any index name on the page.
Stock rotation timeline
Each row is one stock; each square is its group in one week, oldest on the left. Groups use the same rules as the index groups, with the edge measured over the highest of the three hurdles. The top row shows which hurdle was the highest at the time: I for the index, M for the market, C for cash.
Stock table
| Over 3 months | Price return | Trend | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Stock | Company | Group | Hurdles beaten | Return | vs index | vs market | vs cash | Edge | Clears all | 1M | 3M | 6M | 1Y | From 52-week high | Vs 200-day average |
Stock prices are daily closing prices (price only, adjusted for splits and bonuses, not for dividends), updated each trading evening. Index members follow the latest lists published by NSE Indices.
Index rotation: common questions
Why measure against cash as well as the market?
Standard relative strength only says whether an index is doing better than the market. In a falling market, an index can fall 5% while Nifty 500 falls 10% and still look strong. But money parked in a liquid ETF would have earned a small positive return over the same time, with almost no risk. Owning that index cost money compared with simply holding cash.
So the real question is not “is it beating the market?” but “is it beating the best easy alternative?” That alternative is either an index fund on the whole market or a liquid ETF, whichever has done better.
How is the edge calculated?
Edge = index return − the higher of (market return, cash return)
All three returns are over the same period (1 month, 3 months, 6 months or 1 year, chosen at the top). The market is Nifty 500 by default, or Nifty 50. Cash is the Nifty 1D Rate Index. A positive edge means the index beat both.
The change in edge is today’s edge minus the edge 4 weeks earlier (10 trading days in the daily view). The four groups come from these two numbers:
- Leaders: edge above zero and widening.
- Losing momentum: edge above zero but shrinking.
- Gaining momentum: edge below zero but improving.
- Laggards: edge below zero and getting worse.
Why use the higher hurdle instead of showing two separate scores?
Because the two comparisons are linked. An index’s return over cash is its return over the market plus the market’s return over cash:
(index − cash) = (index − market) + (market − cash)
The second part is the same for every index. So at any moment, only one of the two hurdles actually decides things: whichever of market and cash has done better. When the market is beating cash, this page works like a normal relative strength tool. When cash is beating the market, the bar rises, and indices that are only “falling less than the market” drop out of the Leaders.
Why does “Hurdles beaten” sometimes say “Market only” and at other times “Cash only”?
When cash is ahead of the market, an index can beat the market but not cash: it is falling less than the market but still losing to cash. When the market is ahead of cash, an index can beat cash but not the market: it is rising, but less than the market. Only one of these middle cases can happen at a time, depending on which hurdle is higher.
Which return period should I use?
3 months is the default. It is long enough that cash earns a visible return (a little over 1% over the last 3 months) and short enough to catch rotations. 1 month reacts fastest but cash earns very little over a month, so the result is close to plain relative strength. 6 months and 1 year show longer trends. The “Clears both” dots in the table show all four periods at once: an index that clears both hurdles on 3 or 4 of them is showing consistent strength.
Weekly or daily steps?
The step only changes how often the change in edge and the timeline are measured. Weekly is the main view: it uses week-end closes and a 4-week change, and the timeline covers 12 weeks. Daily uses every trading day and a 10-day change, covering 20 trading days, so it shows turns earlier but gives more false starts.
Is the liquid ETF benchmark the same as what I would earn?
Close, but not exactly. The Nifty 1D Rate Index tracks overnight lending rates. Liquid ETFs such as LIQUIDCASE (Zerodha Nifty 1D Rate Liquid ETF) are built to track it, before their costs. Liquid mutual funds usually earn a little more. Switching between equity and cash also has costs and taxes, so a very small edge may not be worth acting on.
If an index is a Leader, is it going up?
Over the chosen period, yes: a Leader has beaten cash, so its return was higher than the liquid ETF benchmark’s, which is almost always positive. This is the main difference from market-only relative strength tools, where a Leader can be falling. Leaders can still be below their 200-day average or far from their 52-week high, which the table shows.
Which indices are included and why?
Size: Nifty 50, Next 50, Midcap 150, Smallcap 250, Microcap 250 (and Nifty 500 when the market is Nifty 50). Sectors: Bank, PSU (public sector undertaking) Bank, Financial Services ex-Bank, IT (information technology), Auto, Pharma, FMCG (fast-moving consumer goods), Metal, Realty, Media, Consumer Durables, Chemicals, Capital Goods, Energy. Themes: CPSE (central public sector enterprises), Infrastructure, India Defence, Capital Markets, India Manufacturing, India Consumption, Commodities, MNC (multinational companies), India Tourism, EV (electric vehicle) and New Age Automotive, India Digital. Strategy: Nifty200 Momentum 30, Nifty200 Quality 30, Nifty100 Low Volatility 30, Nifty Alpha 50, Nifty500 Value 50.
Near-duplicates are left out (for example Nifty Private Bank, which moves almost exactly with Nifty Bank, and Nifty Oil & Gas, which overlaps heavily with Nifty Energy).
Has this idea been used before?
Comparing equities with a cash return is known in research as absolute or “dual” momentum, usually applied to the market as a whole. This page applies the cash test to every index, alongside the market test. It is our own calculation on published index closes. It describes the past, not the future.
How are the stocks inside an index judged?
Stock edge = stock return − the highest of (its index, the market, cash)
All over the same period chosen at the top. The idea is the same as for indices: a stock is only worth the extra risk of owning a single company if it has done better than the easy alternatives, which are an index fund on its own sector or theme, an index fund on the whole market, and a liquid ETF. The four groups and the timeline then follow the same rules as for indices. Members of each index follow the latest lists published by NSE Indices, so a stock that joined recently is shown for the whole period, and a stock that left is not shown.
Where does the data come from and when is it updated?
Daily closing values published by NSE Indices (niftyindices.com). The page updates once each trading day after the close. Data can be delayed or contain errors.
Is this investment advice?
No. The page describes how indices have performed against each other, the market and cash. It does not recommend buying, selling or switching any security, fund or asset class.