BRK.B Options Signal Bullish Bias: Target $520 Breakout Amid RSI Oversold Conditions

• BRK.B trades at $504.59, up 0.27% with RSI at 36.8—its lowest level in months.
• Call open interest dominates (342,250 vs. 204,829 puts), with heavy positioning at $520 and $530 strikes.
• Block trades in deep puts (e.g., $525 strike) hint at institutional hedging ahead of leadership transition.

Here’s the takeaway: The options market is pricing in a near-term rebound, with technicals and sentiment aligning for a potential $520+ move. But watch for volatility if Buffett’s successor team announces strategic shifts.

Where Institutional Money Is Flowing

The options chain tells a clear story. For this Friday’s expiration, BRKB20251212C520 (OI: 2,575) and BRKB20251212C530 (OI: 1,936) dominate call open interest, while BRKB20251212P500 (OI: 1,198) and BRKB20251212P495 (OI: 868) anchor the put side. The put/call ratio of 0.598 suggests aggressive bullish positioning—investors are betting on a break above the 30D support/resistance zone ($508.47–$509.23).

But don’t ignore the block trades. Four large put trades on the BRKB20250919P525 and BRKB20250919P520 strikes (totaling $5.87M in turnover) suggest big players are hedging against a near-term dip. This could signal a “buy the dip” strategy if BRK.B tests the Bollinger Band lower bound at $493.41.

News That Could Shift the Script

Berkshire’s industrial arm and AI-heavy portfolio (Apple, Alphabet, Amazon) are bullish tailwinds. The 7.6% rally since last earnings and $344B cash hoard reinforce its defensive appeal. However, Buffett’s leadership transition introduces uncertainty—Greg Abel’s focus on energy and renewables could reshape capital allocation.

The recent Q2 earnings beat (EPS: $5.17) masked weaker manufacturing results, so watch for follow-up reports. If the industrial segment stabilizes, it could validate the $520+ call bets. Conversely, a slowdown in insurance profits might trigger the puts.

Trade Ideas for Today

1. Options Play: Buy BRKB20251212C520 (next Friday’s expiry) if BRK.B closes above $504.69 (intraday high). Target a $520 close to capture gamma as the strike becomes at-the-money. Stop below $500.54 (intraday low) to cut losses.

1. Stock Play: Enter long near $504.59 with a tight stop at $500.54. First target: $508.47 (30D support/resistance), then $520. If RSI crosses 40 and MACD flips above its signal line, add to the position.

1. Hedge Strategy: Sell BRKB20251212P500 (OI: 1,198) to collect premium if you’re bullish but wary of short-term volatility. This works best if BRK.B holds above $500.54.

Volatility on the Horizon

The next 72 hours will test BRK.B’s resolve. A close above $508.47 would validate the long-term bullish case, while a drop below $500.54 could trigger a retest of the 200D MA at $498.06. Either way, the options market has already priced in a directional move—now it’s about timing the catalyst. For patient traders, the $520 call strikes offer a high-conviction play if the fundamentals hold. But don’t ignore the puts: Berkshire’s cash pile and Buffett’s legacy mean it’s never a one-way bet.