The Nifty-50 index was up 5.6 per cent in November. A report by Kotak Institutional Equities said that "as per our 'Nifty fair value' model that accounts for changes in index valuation by looking at expected growth, bond yields, profitability and VIX, the index is now 13 per cent overvalued, compared to 8 per cent at the end of October".

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"While index starting valuation may not be a sufficient pre-condition for a price-correction, we do not expect any decent upside to the Nifty index over the next six months and do anticipate a time-correction," the report said.

"In addition, with realized volatility dropping to an extremely low level, we recommend caution in the medium term," the report said.

The report said that momentum has worked quite well over FY2024, and November was no exception. Since the start of FY2024, concentrated and broad momentum portfolios have returned 35 per cent and 25.2, compared to 17 per cent for the Nifty index.

Concentrated and broad momentum portfolios returned 10.6 per cent and 8.9 per cent, respectively, in November.

The optimized BSE-200 momentum portfolio returned 14 per cent, while the optimized Nifty-50 momentum portfolio returned 9.9 per cent.