Few stocks have experienced the thrill of victory and the agony of defeat more than Agrium (AGU).

The Calgary-based agricultural chemical maker soared more than five-fold from May 2006 before peaking in June last year. But then ag prices tumbled … and so did AGU. The stock fell almost as far as it had ascended, but it took only six months for the plunge.

Now the shares are on the rebound, having gained nearly 100% since bottoming in December. For more than a month, this rally has been sustained by the dual support of the stock’s 20-day and 50-day moving averages.

Yesterday, the stock popped nearly 5%, putting it above the February and early April highs.

Sentiment toward AGU is what I like to see for my bullish plays — pessimism on all fronts.

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Keep in mind that optimistic sentiment represents higher expectations and, thus, can create some vulnerability if those expectations aren’t met. Conversely, pessimism reflects lower expectations that often lead to upside earnings surprises.

The put/call ratio is coming off an annual high, suggesting that extreme pessimism among options traders may be unwinding heading into earnings.

Elsewhere on the sentiment front, only four of nine covering analysts rate the shares a “buy.” And the short-interest ratio, though low on an absolute basis, has spiked to an annual high.

As for earnings, analysts expect a 53% contraction in profits from a year ago. It all adds up to a very low expectational environment, which leaves the shares open to an upside surprise when AGU reports Wednesday, May 6.

I’d consider call options on AGU.

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Jon Lewis is the co-editor of The Winning Edge trading service designed to help you make options profits around corporate earnings and other market events. For more information about Jon, read his bio here.