Don't rush to buy the dip yet, warns Ajay Bagga; here's why

The banking sector is currently experiencing volatility, with recent declines noted, but is also highlighted as a potential future rally sector. Investors should monitor asset quality and credit growth closely amidst global economic uncertainty.

For banking, consider a 'wait and watch' approach for now, looking for strong fundamental players on significant corrections, focusing on those with robust NIMs and asset quality.

For Indian markets, this story mainly matters for the Power, Renewable Energy, Banking pocket. The current signal is bearish, so traders should watch whether the effect spreads across the sector or stays limited to a single name.

Watch whether the market validates this read through price action, volume, and breadth. If the headline matters, the signal should show up in execution, not just in commentary.

• •Ajay Bagga advises investors to exercise patience amid Middle East conflict.
• •He warns against chasing early market upticks due to elevated downside risks.
• •Bagga anticipates a prolonged conflict could trigger a strong global recession, impacting GDP significantly.
• •He identifies power, renewables, and banking as potential sectors for future rallies.
• •Risk flag: Potential global recession impacting credit demand and asset quality.