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India’s record-breaking stock market is approaching overheated levels after a victory by Prime Minister Narendra Modi’s party in three state elections spurred a rally on Monday.

The Nifty 50 Index’s 14-day relative strength index — a gauge of price momentum — is nearing a two-standard deviation threshold. Declines of more than 9% on average have followed in the five instances going back to 2018 when Nifty punched above this line, data compiled by Bloomberg show. 

Modi’s Party Wins Key State Polls, Boosting Bid for Third Term

But, with Indian equities beating other emerging markets this year and foreign investors turning net buyers again, warning signs flashed by technical indicators like the RSI may not dissuade investors from chasing the rally. 

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