Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese battery manufacturer Advanced Battery Technologies (Nasdaq: ABAT) were fully charged today, gaining as much as 25% in intraday trading on heavy volume.

So what: If you're a Chinese small cap right now, you are in an all-out war with short-sellers. A few short-sellers appear to have scored direct hits -- as in the cases of RINO International and China MediaExpress -- while they've met with a fighting stance from other companies such as Orient Paper. Go ahead and add Advanced Battery to the latter list. The company today issued a point-by-point rebuttal to the short case presented by Variant View Research. The company took a hard stance against the claims with statements such as "Variant View seems either incapable of getting it right, or, more likely, does not care to." Based on today's stock action, many investors appreciated that the company put its foot down.

Now what: Certainly the fact that Advanced Battery fought back against the fraud claims isn't proof positive that the claims don't hold water. Of course, a read over Variant View's report, along with Advanced Battery's rebuttal, does make the former's allegations sound pretty flimsy. While Advanced Battery and its stock are looking good today, the world of Chinese reverse-merger small caps has proven to be a minefield. Investors who do manage to find companies that have been wrongly attacked should end up doing quite well, but any investor who's venturing in needs to tread very carefully.

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Fool contributor Matt Koppenheffer does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.