Medtronic (MDT), a major player in the medical appliance and equipment field (pacemakers, defibrillators, stents, catheters, drug delivery devices, etc.), reports earrings on Aug. 25.

The company has a solid earnings track record, having missed just one analyst estimate in the past 18 quarters. The Street expects a modest profit increase of just 8% for the quarter, which compares favorably to the average 12% gain for the past four quarters.

On the chart, Medtronic has been rising steadily since March, gaining more than 50% since the bottom.

Recently, the shares have found solid support from their ascending 10-day moving average, a trendline the stock hasn’t closed a day below in more than a month. Note how the 10-day provided a solid foundation during this morning’s market weakness.

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Sentiment toward Medtronic, although mixed, contains enough pessimism to sustain the stock’s current momentum.

This caution is evident among options players, who have bumped up the volume on MDT puts to push the put/call ratio to just shy of an annual high. Such peaks in the ratio are usually accompanied by strength in the stock.

Medtronic reports on Aug. 25, so we have time to pick an optimal entry point. With the 10-day as support and fear among options players poised to unwind, MDT is looking like a solid earnings play on the long side.

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