Home Depot (HD) Options Signal Bullish Bias at $370–$415, But Short-Term Bearish Momentum Adds Caution

Quick Take

• HD’s options market shows heavy call open interest at $370 (this Friday) and $415 (next Friday), suggesting a potential upside breakout above $345.66.
• Technicals hint at short-term bearish pressure, with RSI near 56 and MACD below zero, but long-term range-bound structure offers volatility opportunities.
• Earnings on Dec 12 and a new smart home product line could drive momentum, but a recent 8% post-earnings drop adds risk.

Here’s the Core Insight

HD’s options activity and technicals paint a mixed but actionable picture: bulls are eyeing a $370–$415 breakout, while bears watch for a pullback to $340. The key is timing—use today’s data to position for either scenario.

What the Options Chain Reveals About Market Sentiment

Let’s start with the numbers. This Friday’s options show the most open interest at $370 calls (OI: 2,190) and $340 puts (OI: 760). Next Friday’s chain is even more telling: $415 calls (OI: 2,406) and $315 puts (OI: 1,778) dominate. That’s not random—it’s a signal.

The call-heavy skew (put/call ratio: 0.867) suggests investors are pricing in a bullish bias, especially with HD’s Q4 earnings release on Dec 12 and a new smart home product line. But don’t ignore the bearish undercurrent: HD’s 30-day moving average is at $360.65, and the stock is currently below it. If the price can’t hold above $344.0 (intraday low), the $340 put strike could act as a magnet.

How News and Earnings Could Shift the Narrative

HD’s recent headlines are a mixed bag. The Q4 earnings beat and new smart home line are bullish, but the 8% post-Q3 earnings drop and a $150 million data breach settlement add volatility. The $2 billion buyback program is a positive tailwind, but it’s a short-term fix.

Here’s the kicker: HD’s earnings on Dec 12 are expected to show a 4.2% revenue increase. If the results beat estimates, the $370–$415 call strikes could ignite. But if the stock dips below $344.0, the $340 put strike might see a surge in activity.

Actionable Trade Ideas for TodayFor Options Traders

• Bullish Play: Buy HD20251212C370 (this Friday’s $370 call) if HD breaks above $345.66. Target a close above $348.95 (intraday high) to justify the trade.
• Bearish Play: Buy HD20251219P340 (next Friday’s $340 put) if HD dips below $344.0. The 30-day support level at $353.73 could act as a dynamic stop-loss.
• Neutral Play: Sell the HD20251219P315 put (OI: 1,778) if you’re confident in the $344.0 support level.

For Stock Traders

• Entry: Consider buying HD near $344.0 if it holds above the 30-day support (353.73–354.79).
• Target: Aim for $353.73 (30-day support) as a short-term goal, with a longer-term target at $366.98 (200-day resistance).
• Stop-Loss: Exit if HD falls below $340, as that could trigger a larger pullback.

Volatility on the Horizon

HD’s options market is pricing in a 10–15% move by Dec 19, driven by earnings and product launches. The key is to stay nimble: if the stock breaks above $348.95, the $370 call strike becomes a high-probability play. But if it dips below $344.0, the $340 put could become a liquidity magnet.

Final Takeaway

HD is at a crossroads. The options data leans bullish, but technicals and recent volatility demand caution. Use today’s price action to test the $344.0 support level and watch the Dec 12 earnings report like a hawk. If you’re right, the $370–$415 call strikes could be your ticket to a strong move. If not, the $340 put is there to catch the fall. Either way, the market is setting up for a clear directional trade—now it’s up to you to decide which way to bet.