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By Dr. Declan Fallon

These picks are from a scan looking for stocks making new highs on heavier volume:

China Bak Battery (NASDAQ:CBAK) managed a picture perfect consolidation breakout Wednesday but has run into a little follow through trouble early Thursday. A successful measured move could see this push $4.50 but the breakout gap around $2.45 might be a too enticing as a pull down. I am siding with a fall and have set a YourCall stop at early day highs.

click to enlarge

China Sunergy Co. (NASDAQ:CSUN) is another extended looking Chinese stock. It may play a repeat of its March rally and drift until its 20-day MA catches up - perhaps even making it back to its lower BB band. Reason enough to take some profits for those that have some to take.

The third Chinese stock to watch is China Technology Development Group (CTDC). In the short term it has the same issues as the aforementioned stocks but does at least have a base to build off. Could form a nice cup-and-handle pattern if it was to find support at the 20-day MA. Support at $2.72 - an alternative entry opportunity?

Level 3 Communications (NYSE:LVLT) is also looking at a potential cup-and-handle with support around $1.24 to catch a back test. Watch for volume breakout at the psychological resistance of $1.50. Project target of $2.40 if a break of $1.50 is supported.

Olympic Steel (NASDAQ:ZEUS) is enjoying its second day of sizable gains but when the dust settles there might be a good long side opportunity. Watch the 20-day MA for entry opportunities.

All five are watchlist material.