New tech bubble? Not quite, but we could see a correction soon: Pro

The Dow breaking 17,000 may have gotten all the headlines. But, there's another index that's not too far from making a record high of its own.

The Nasdaq Composite Index – synonymous with the tech bubble of 2000 – is just 13.4 percent away from breaking its record close of 5,048.62 set on March 10, 2000. In the last seven months alone, the index gained 13.5 percent.

The last time the Nasdaq Composite was at these levels, names such as Cisco and Microsoft dominated tech stocks. Today, Apple and Facebook are the ones grabbing the attention.

Does that mean valuations are more reasonable this time around?

"Generally speaking they're fair," said Dan Greenhaus, chief global strategist at BTIG. "But, technology, really more than any other sector, is divergent."

Greenhaus, a CNBC contributor, said there are pockets of the market that are "spectacularly expensive" while others are more attractive. "Together, obviously, it balances out," he said. "I don't think tech is particularly unattractive at all and in fact it's one of our overweights for our clients."

What's driving the Nasdaq to new highs are a handful of stocks, but that may not be a terrible thing, according to Richard Ross, global technical strategist at Auerbach Grayson. However, he does have some concerns.

"The good thing in terms of the chart and the performance of the NASDAQ is its composition," said Ross, a "Talking Numbers" contributor, who notes that the index is heavily weighted toward its top 10 stocks. "Those large-cap tech stocks have really been performing this year and their valuations [are] not astronomical relative to some of those highfliers that grabbed the headlines earlier this year."

After making a 10 percent correction to its 200-day moving average in April, the index subsequently broke out of its trading range of between 4,000 and 4,400 last month. "But we've done it in almost vertical fashion," said Ross. "That's typically not the type of healthy sustainable fashion that we like to see…. I don't think you want to chase a vertical move like that."

The longer-term chart of the Nasdaq Composite also worries Ross. Though three years ago it broke out from a head and shoulders bottom that began in 2008, he has concerns about the index's seemingly vertical trajectory. "Is it tech-bubble 2.0?" asks Ross. "Not quite the same dynamic here, but we are vulnerable here to a sharp pullback as complacency sets in."

Long-term bull markets have pullbacks of as much as 20 percent, said Ross. "This trade reminds me a lot of the gold trade or the Apple trade," he said. "You couldn't say anything negative about gold on its run to $2,000. You couldn't say anything negative on Apple on its run to $700. And now, to even hint that you're bearish about technology stocks is really something that's quite unpopular out there…. So, that is telling me that there is some sort of a speculative euphoria or a mania that is really vulnerable to that type of sharp pullback."

To see the full discussion on the Nasdaq Composite Index, with Greenhaus on the fundamentals and Ross on the technicals, watch the above video.

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