Lorillard, Inc. (LO - 134.66) was quite an overachiever last month, notching an all-time best of $138.88 on April 13. And it appears that LO could have the legs to climb higher.

After taking a hit due to last Wednesday's first-quarter earnings miss, the stock briefly dropped below support in the $126-$128 area for the first time since mid-February. But since that time, the shares have rallied back atop their 40-day moving average, and are in the process of solidifying a perch above the $132-$134 region. From a longer-term perspective, LO has tacked on 17.2% year-to-date, and added 24.2% over the past 52 weeks. On a relative-strength basis, the equity has outpaced the broader S&P 500 Index (SPX) by roughly 14% over the past three months.

Despite this technical prowess, it looks as though a number of traders are betting that LO's ascent will be short-lived. Short interest rose 9.7% over the most recent reporting period. At LO's average pace of trading, it would take nearly one week for all of the shorted shares to unwind, which could translate into a contrarian boon for the stock.

Elsewhere on the Street, pessimism is teeming in the options pits, as evidenced by LO's 10-day put/call volume ratio of 3.88 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks above 89% of all other readings taken during the past year, suggesting that options traders have bought bearish bets over bullish at a faster clip than usual during the past couple of weeks.

Even the brokerage bunch is skeptically skewed toward LO, with six out of nine analysts doling out a middling "hold." What's more, the average 12-month price target rests at $140.22, which represents a slim 5% premium to yesterday's close of $133.56.

In light of LO's solid performance on the charts, a fresh round of upgrades and/or price-target hikes, or a capitulation among option bears or short sellers, could provide an additional boost for the tobacco concern to extend its quest for new historic highs.