Home Depot (HD) Options Signal Bullish Bias at $360–$420: How to Play the Earnings-Driven Breakout

• HD trades at $347.47, down 0.7% from $349.91, but sits near its 200D MA of $366.97
• Call open interest dominates at $360–$420 strikes for next Friday, while puts cluster at $340–$347.5
• Q4 earnings on Jan 17 and 100 new stores in 2026 fuel long-term optimism

Here’s the takeaway: HD’s options market is pricing in a strong upside bias ahead of key catalysts, but technicals show caution. The stock is in a short-term bearish trend but long-term range-bound, with a put/call ratio of 0.868 (calls > puts) suggesting aggressive bullish positioning. Let’s break down what this means for traders today.

Bullish Calls at $360–$420 Signal Earnings Optimism

The options chain tells a clear story: traders are loading up on calls at strikes $360–$420 for next Friday’s expiration. The HD20251219C360 contract has 1,787 open interest, while the HD20251219C420 has 2,171 OI—the highest of any strike. This suggests a belief that HD could surge past $360 (its 30D MA) and test the $420 level by mid-December.

Conversely, puts at $340 (HD20251219P340: 2,045 OI) and $347.5 (HD20251212P347.5: 845 OI) show defensive positioning. The lack of block trades means no major institutional bets are skewing the data, so retail and institutional players are aligned here.

Earnings, Expansion, and Sustainability Fuel the Narrative

The news flow is a mixed bag but leans bullish. The Q4 earnings date (Jan 17) and Q3 beat ($4.25 EPS) give investors something to chase. The 100 new stores in 2026 and eco-friendly product line align with long-term growth themes, while the CEO transition (Carter to take over in 2026) adds stability.

However, the data breach lawsuit and economic uncertainty create headwinds. The key is whether HD’s management can execute its expansion and digital transformation without stoking costs. For now, the market seems to trust them—hence the call-heavy options positioning.

Actionable Trades: Calls at $360–$420, Puts at $340 for Insurance

For options traders:

• Bullish Play: Buy HD20251219C360 at $360 if the stock breaks above its 30D MA ($353.72). Target $380–$400 if the stock holds above $347.5 (current support level).
• Conservative Play: Buy HD20251219P340 at $340 as insurance if the stock dips below $346.24 (intraday low). This protects against the data breach lawsuit risk.

For stock traders:

• Entry: Consider buying HD near $347.5–$350 if it holds above the lower Bollinger Band ($329.09).
• Exit: Target $365–$370 if the stock breaks above the 200D MA ($366.97). Stop-loss below $340 to avoid downside surprises.

Volatility on the Horizon: Balancing Earnings Hope and Near-Term Caution

HD is at a crossroads. The options market is pricing in a $360–$420 move by mid-December, driven by earnings optimism and expansion plans. But technicals show the stock is still below its 200D MA, and RSI at 45.29 suggests it’s not overbought.

The path forward? If HD can hold above $347.5 and surprise to the upside in Q4, this could be a breakout setup. But if it fails to hold key support levels, the puts at $340 will become critical. Either way, the next two weeks will test whether the bullish options bets pay off—or if reality sets in.