Don’t look now, but FedEx (FDX) is trading at a nine-month high. In fact, the stock has more than doubled off its March low. That bodes well for the economic recovery, as FedEx is considered a bellwether for the health of commerce.

A look at the technicals shows the stock appears to be emerging from some stickiness around the $70 level. That’s where the shares peaked in early August and where they found tough going last week.

But with the help of support from the 20-day moving average, the shares are once again on the move.

We see the next area of possible resistance at $75, the strike of peak call open interest in the September series (heavy call strikes often define tops).

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 Analysts are looking for a sharp pullback in profits from FDX for the quarter when the company reports earnings on Sept. 17. But keep in mind that pessimistic sentiment reflects lower expectations that often lead to upside earnings surprises. (Conversely, optimism represents higher expectations and, thus, can create some vulnerability if those expectations aren’t met.)

The expected decline of 65% in earnings compares favorably (in terms of expectations) with the average drop of 38% for the past four quarters.

What’s more, the shares have gained around 8% within the two weeks following the past two earnings reports, which both showed sharp year-over-year plunges in profits.

Sentiment is also aligned against the shares.

The put/call ratio looks to be peaking at a level that has marked previous bottoms in the stock. And just two of 15 analysts rate the shares a “buy.” That configuration hasn’t changed for the past three months, even though the stock advanced 25%.

Perhaps it’s time for some of those skeptics to jump aboard the rather empty FedEx bandwagon.

A stock busting out to multi-month highs amid a skeptical sentiment environment is typically a bullish play in our book and a good opportunity to buy call options ahead of earnings.

FedEx doesn’t report for a week, so we have time to see whether the market continues to push higher before jumping in. 

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