Cummins Inc. (NYSE: CMI) shares are trading higher today after CNBC's Jim Cramer said Friday night on his television show the company has a clear technological advantage over the competition because its engines are designed to be more efficient than future emissions standards dictate. This could be good news for CMI in the long run. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CMI.

After hitting a one-year high of $71.725 in October, the stock hit a one-year low of $38.11 in January. CMI opened this morning at $58.78. So far today the stock has hit a low of $57.50 and a high of $59.46. As of 1:15, CMI is trading at $58.58, up $2.52 (4.5%). The chart for CMI looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just five months as long as CMI is above $35 at September expiration. Cummins would have to fall by more than 40% before we would start to lose money.

CMI hasn't been below $38 at all in the past year and has shown support around $47 recently. This trade could be risky if the company's earnings (due out Wednesday before the market opens) disappoint, but even if that happens, that position could be protected by support the stock might find just between $40 and $50, where it has bottomed over the past few months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CMI.