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Market Vulnerable? Go Short and Go Long

Stocks in this article: CXDC KERX BBSI GME

NEW YORK (TheStreet) -- The market is vulnerable here. So today we're going to look at a couple of shorts in addition to longs.

On the long side, China XD Plastics (CXDC) exploded on Wednesday, up 85 cents, or 17.6%, to $5.74 on 1.6 million shares. That's unprecedented volume for the stock, breaking it above the double-top in the $5.50 area from October and November. (On Thursday at 3:45 p.m., the stock had cooled down to $5.30.)

Looking at the longer-term chart, the stock has formed a major base going back three years, which may have been taken out. But the stock needs to follow through above Wednesday's high at $5.90 to get it up to our next target at $7.25.

Keryx Biopharmaceuticals (KERX) has been in a rising channel, which followed its big spike up in January 2013 and then the multi-month consolidation. The stock in recent months has stair-stepped up its channel in a series of small corrections, or falling wedges, and then breakouts. On Wednesday it had a big spike-up out of its most recent correction, up 2.45, or 17%, to $16.54 on 16.4 million shares. That's the second highest close the stock has seen since 2006. There's key resistance up around $19.00, which is the next potential target going forward.

Keryx continued it charge ahead Thursday, and at 3:45 p.m. it was at $16.84.

On the short side, Barrett Business Services (BBSI) has come down hard in recent months. It initially bounced at around the $60 level, but then rolled over. On Wednesday it cracked that support zone, falling $2.39 to $59.06. On Thursday at 3:45 p.m. the stock was at $59.44. Looking for this stock to move quickly down toward $49. 

GameStop (GME) has been in a big down-channel since late last year. At 3:45 p.m. Thursday, shares were trading at $37.34. Recently the stock has been moving up in a bearish wedge, and any break underneath $36.75 could see this stock running down quickly, potentially first to $33, and then $28.

See Harry's video analysis on these stocks.

No holdings.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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