The Shanghai Composite Index may test the key 1300 level again today, but further gains will be limited by profit-taking pressure.

The strong performance of auto shares helped stabilize sentiment, but many sectors, such as metals and properties, are under profit-taking pressure.

The moves raised hopes that fresh money will flow into the market and helped boost sentiment.

More selling is possible in the future, because of the changes in the demand-supply situation.

Many shares appear to be a bit expensive after recent strong gains and investors are starting to cash out.

Profit taking will be key words today (Thursday) and over the next couple of weeks. The Fed's rate cut yesterday bodes well for the longer term but near term it is an excuse to take profits. Cisco's story is another excuse to take profits in technology.