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Yet, the bulls are undeterred. Nifty 50 is hovering around all-time highs after breaching 17,000. And it has defied a series of markers that have been precursors to corrections in the past.

That has made some analysts and market veterans edgy, while others don't see bulls retreating anytime soon:

Bigger Than Past Bull Runs

BofA’s analysis of past bull and bear rallies suggests Nifty 50 may have run out of wind.

A typical bull run lasts about 75 weeks, providing an average 106% return, according to the brokerage’s note. After such rallies, markets typically correct about 30% over a four-month period, it said. The current rally has amassed a 118% total return over 73 weeks, it said, predicting limited further runway in light of emerging near-term risks including peak valuations, fed tapering fears, a rise in U.S. yields, earnings downgrades in India and muted IPO gains after an initial euphoria.

When Nifty 50 was at 16,500, BofA expected it to drop to 15,000.

A Valuation Marker For Retreat

The benchmark’s two-year forward earnings multiple is at a premium of 8% over two standard deviations, the highest since 2006. It has always retreated from these levels in the past.

Mid- And Small-Cap Bubble Zone

For its caution, JM Financial cited that the small cap index reached 83% of Nifty price-to-book, topping the peak of 82% in January 2018. The mid cap index at 78% is lower than 88% in January 2018.

Unlike the 2017 mid- and small-cap boom, the risk to liquidity tapering and valuation correction is higher this time due to higher component of discretionary retail money and even foreign institutional investors participating in mid and small caps.

Other Worrying Signals

According to DSP Mutual Fund, since Nifty 50 rebounded from March 2020 lows, it has not fallen more than 10% from its lifetime highs.

A rare trend only witnessed in 2014 and 2017, But that was followed by 20% and 15% corrections, the asset manager said, advising investors to be prepared.

Globally, too, the "Buffett indicator" or stock market capitalisation-to-GDP ratio, rose to a record, surpassing the previous high of 2000

The S&P500 10-year price-to-earnings multiple is 38.6, nearly twice the modern modern-era average of 19.6.

Yet, Carnelian Capital's Vikas Khemani advised against booking profits at 16,500, citing the age-old wisdom of not to time the market.

That has paid off until now.

Nifty 50 has gained 5% since the predictions of a correction started.

Room For Upside?

Nifty trades at 19 times estimated earnings for calendar year 2022 and 17 times to 2023 against a 10-year average of 21 times, according to a Centrum report. Also, it trades at one standard deviation premium to MSCI Emerging Markets Index PE multiple while it has historically traded as high as two standard deviations higher.

Not surprising to find those who expect the benchmark to soar further.

Elara Capital, for one, has raised its Nifty target to 19,600.