Taiwan share prices are expected to fall next week with investors likely to pocket profits after the market made a strong showing in recent weeks, dealers said.
Selling pressure may particularly intensify as the market approaches the nearest resistance level of around 7,400 points, they said.
However, ample liquidity is expected to stabilise the broader market to some extent with active rotational interest in select traditional industrial stocks rather than electronic heavyweights.
The market is expected to move between 7,280 points and 7,480 points next week.
For the week to March 5, the weighted index closed up 198.67 points or 2.77 percent after a 1.11 percent increase a week earlier.
The average daily turnover stood at 165.61 billion Taiwan dollars (5.24 billion US), following an average of 136.13 billion dollars a week ago.
"Profit taking selling was seen in late Friday trade ... That indicates investor sentiment has turned cautious after recent significant gains," Yuanta Core Pacific Capital Management analyst Jacky Tam said.
During the past six weeks, the local bourse has risen almost 1,000 points or 15.6 percent.
"I expect such caution will continue next week ahead of the critical level of 7,400 points. Market movements may become volatile," Tam said.
Tam said with electronic firms scheduled to report their April sales next week, investors will watch closely whether the sector has been affected by the current slow season.
"In particular, investors are concerned about personal computer sales amid signs of slow demand," he added.
However, the steel sector is expected to stay relatively stable on expectations that China Steel will raise the wholesale prices for its products later this month, Tam said.