BRK.B Options Signal Bullish Bias: Key Strikes and Strategies for Jan 23 Expiry

• BRK.B trades at $494.21, up 0.32% with volume surging to 2.27M shares.
• Calls dominate open interest (372K vs. 198K puts), with heavy call OI at $500–$510 strikes.
• New CEO Greg Abel’s active management and $380B cash hoard fuel optimism.

Here’s the takeaway: options data and news align for a bullish bias, but technicals hint at short-term caution. Let’s break it down.

Bullish Sentiment in Options, But Watch the RSI

BRK.B’s options chain tells a story. This Friday’s top OTM calls ($500, $505, $510) have combined OI of 39,567 contracts—nearly double the top puts ($490, $480) at 15,354. That’s a clear tilt toward buyers expecting a rally. The put/call ratio of 0.53 (call-heavy) reinforces this. But here’s the catch: RSI at 36 suggests oversold conditions, and MACD (-1.45) remains bearish. The market isn’t all-in on a breakout—yet. Traders are hedging their bets, with heavy put OI at $490 acting as a safety net if the stock stumbles.

Abel’s Takeover and OxyChem Add Fuel to the Fire

Greg Abel’s CEO transition isn’t just a name change. He’s a Buffett protégé with a knack for operational tweaks—think efficiency upgrades at subsidiaries. The $9.7B OxyChem acquisition? A strategic move to diversify into industrial chemicals, a sector with steady demand. Combine that with $380B in cash, and you’ve got a CEO with both a safety net and a slingshot. Retail investors are betting on Abel’s "active management" to unlock value, which explains the call buying. But don’t ignore the puts: if Abel’s early moves underwhelm, the stock could test $490 support.

Trade Ideas: Calls for Gains, Puts for Protection

For options players, the BRK.B20260123C500 call (expiring Jan 23) is a standout. With OI at 4,371, it’s the most liquid next-week strike. Why? The $500 level is just below the 30D MA (499.68), and a close above it could trigger a rebound. For a conservative play, pair it with a BRK.B20260123P490 put (OI: 1,771) to cap downside risk.

Stock traders: Watch the Bollinger Bands. If BRK.B holds above the lower band ($492.15), consider entries near $492.50 with a target at $500. A break above the 200D MA ($496.49) would validate the bullish case. But if RSI fails to climb above 40, tighten stops to $490.

Volatility on the Horizon

Abel’s active management and OxyChem’s integration could drive near-term moves, but technicals suggest a bumpy start. The key is balancing optimism with discipline—calls offer upside, but don’t ignore the puts. This isn’t a straight-line trade. It’s a dance between Abel’s operational edge and market skepticism. Stay nimble, and let the data guide your next move.