Is J.M. Smucker worthy of its new Buy rating?

Speaking of uptrends, it's worth noting that SJM has added more than 19% since touching a near-term low of $37.22 on Nov. 18, 2008. The stock has now toppled former resistance from its 10-week moving average, and it's currently poised to finish the week atop its 20-week trendline for the first time since last September.

Despite the equity's technical strength, there's plenty of pessimistic sentiment that could unwind to propel SJM even higher. During the past 10 days, option traders on the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE) have bought to open 10.6 puts for every call. Short sellers are also loading up on bearish bets, as short interest on SJM jumped by 26% during the most recent reporting period.

For those of you who are hesitant about investing in any stock amid the current economic environment, bear in mind that Smucker is not subject to the same vagaries of discretionary spending as, say, the makers of expensive tech gadgets. As Janney Montgomery Scott noted today, "SJM's product portfolio is strongly weighted to cooking/baking at home. We believe the cook-at-home trends will continue to show strength during this recession, providing a solid foundation for organic sales and volume growth."

Overall, there's a lot to like about SJM (aside from the fact that it's neither a bank nor an automaker). The stock boasts strong price action and a solid fundamental position, and it could catch an additional boost as the bears are forced out of their losing bets during the short term.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.