Adobe's Options Signal Key Strike Battles: Bearish Setup at $325 and $342.5 Amid Downtrend

• Adobe (ADBE) trades at $326.26, down 2.76% from its previous close, with intraday lows near $325.50.
• Options open interest shows heavy bearish positioning at the $325 put strike (OI: 1,188) and bullish bets at the $342.5 call (OI: 839).
• Technicals confirm a bearish bias: price sits below all major moving averages, and RSI hovers near neutral territory at 54.6.

Here’s the core insight: Adobe’s options market is bracing for a potential breakdown below $325, with bearish momentum amplified by technical indicators. While bulls are hedging near $342.5, the broader trend suggests downside risk outweighs near-term optimism.

Bearish Sentiment Locked in at $325 and $342.5: What Options OI Reveals

The options chain tells a story of divided expectations. For Friday’s expiry, puts at $325 ($325.5 lower Bollinger Band level) dominate with 1,188 open contracts—nearly double the next strike. This suggests institutional players are hedging against a sharp drop, possibly targeting support breakdowns. Meanwhile, calls at $342.5 (near 30D support/resistance at $337.33) show 839 open contracts, hinting at cautious bullish bets if the stock rallies toward its 30D MA.

But here’s the rub: the put/call open interest ratio (0.82) favors calls, yet technicals (bearish Kline pattern, negative MACD) scream caution. This dissonance means traders are either buying calls as insurance or expecting a rebound off key levels. The danger? If $325 breaks cleanly, the $315 put strike (OI: 1,064) could become the new battleground.

No News, But Options Tell a Story

Adobe’s news feed is eerily quiet, which means the options activity isn’t reacting to earnings surprises or product launches. Instead, the bearish bias likely stems from broader market jitters—tech stocks are under pressure as rate hike fears resurface. Without fundamental catalysts, the stock’s direction hinges on technical support/resistance levels and options-driven liquidity.

Investor perception matters here. If Adobe’s price clings to the $325 level, it could attract bargain hunters. But a close below that would likely trigger a cascade of stop-loss orders, accelerating the decline. The lack of news makes options sentiment the most reliable signal right now.

Actionable Trades: Puts at $325, Calls at $342.5, and Key Stock Levels

For options traders: Sell the $325 put (Friday expiry) if ADBE holds above $325.50. With 1,188 open contracts, this strike could see heavy gamma exposure if the stock dips. Alternatively, buy the $315 put (next Friday expiry) for a longer-term bearish play, given its 1,064 OI. On the bullish side, the $342.5 call (Friday expiry) offers a high-probability trade if the stock rebounds toward its 30D MA at $337.33.

For stock traders: Consider entry near $325 if the price holds above the lower Bollinger Band ($323.41). A bounce here could target the 30D support at $337.33. Conversely, short ADBE near $333 (today’s open) with a stop-loss above $337.95 (30D resistance). The 200D MA at $382.23 is a distant ceiling, but near-term targets are much closer.

Volatility on the Horizon: Preparing for Friday’s Expiry

With 1,188 puts and 2,235 calls set to expire Friday, liquidity will likely condense around $325 and $342.5. If ADBE closes above $325, the $337.33 support could attract buyers. A close below $325, however, might force a reevaluation of the $315 put level. The RSI at 54.6 isn’t extreme, but the MACD’s negative divergence (-2.99) suggests momentum is tilting bearish.

The bottom line? Adobe’s options market is a microcosm of the broader tech sell-off. While bulls are hedging near $342.5, the technical setup favors a test of $325. Traders should watch Friday’s expiry closely—liquidity shifts here could either stabilize the stock or accelerate its decline. Position yourself at the key strikes, and stay nimble. The next move might come faster than expected.