The bulls got started first thing this morning, driving stocks upward on the heels of great news from the financial sector. Yet, we're finding some more compelling setups (and profit-taking opportunities) mostly from the small caps in the minerals and metals world. Take a look at charts of Li-ion Motors Corp (OTC:LMCO), Network Engines, Inc. (NASDAQ:NENG), and North American Palladium Ltd. (AMEX:PAL)

You ever notice how things can be too perfect? Such is the case with Network Engines, Inc. (NASDAQ:NENG) today. This small cap stock is at new 52-week highs today, thanks to a 59% rally over the last three weeks. In fact, NENG is up 666% since the end of 2008.

What's wrong with that kind of strong momentum? Nothing in moderation, but a lot when it's poorly paced. And, I don't think it's any secret that Network Engines shares have been poorly paced since late March. That, however, isn't the contrarian/bearish part of my outlook.

No, NENG is on my sell list because (drum roll please) this small cap is one of the absolute favorites among the stocks being discussed on all the message boards today. Folks, when all the owners - potential and current - start buzzing in unison about how great their stock is, that stock is generally at a high, as there are no more buyers left to step in. Such is the case with Network Engines, Inc. today. I advocate a Warren Buffett mentality and "selling it when everyone else wants it", 'cause it's probably not going to get any better than this.

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It may be a tad premature to go ahead and suggest taking profits on any North American Palladium Ltd. (AMEX:PAL) trades that may have stemmed from my April 1st (conditionally at the time) bullish call on the small cap stock. But, given the way - and where - the stock's acting today, it wouldn't be wrong to take what gain you've got and go home.

You may recall I was impressed with the way PAL had been so easy to trade with its support and resistance lines. They were all clear, and they all held up consistently, or when they didn't, the stock managed to almost always make it to the next line. That's why I bring it up today, in fact..... North American Palladium shares are pretty much at the long-term resistance line that's framed the entire 'Dec. 08 through now' rally.

More importantly, North American Palladium Ltd. gapped up at the open today, and hasn't moved a smidge. I sense hesitation here, which is an omen of a bag you don't want to be holding. Let's just continue playing the support and resistance lines, and make an exit on PAL for now.