Costco (COST) Options Signal Bullish Bias: Key Strikes and Trade Setups for Jan 2nd, 2026

• COST trades at $855.09, down 0.84% from its previous close, with short-term bullish momentum clashing against long-term bearish trends.
• Options data shows heavy call open interest at $915 (next Friday) and puts at $845, signaling a tug-of-war between cautious optimism and downside protection.
• Analysts remain split: 37 firms rate COST as a "Moderate Buy" with a $992 average target, but technical indicators hint at near-term volatility.

Here’s the core insight: The options market is pricing in a high-probability range between $845 and $915, with institutional players betting on a potential rebound. But the stock’s 200-day moving average ($950.86) looms as a psychological hurdle. Let’s break it down.The Options Imbalance: Where Smart Money Is Betting

The options chain tells a story of cautious bullishness. For next Friday’s expiration, COST20260109C915 (OI: 942) is the most watched call, suggesting speculators are eyeing a 6.4% move higher. Meanwhile, puts at $845 (COST20260109P845, OI: 445) act as a floor for downside scenarios. The put/call ratio of 0.795 (calls dominate) reinforces this bias, but don’t ignore the block trade: 80 contracts of COST20250926P942.5 were sold recently, hinting at institutional confidence in the stock’s ability to stay above $942.50.

The Risk? If COST fails to hold above $854.34 (30D support), the puts at $845 could ignite a short-term selloff. But the bullish case gains strength if the stock reclaims its 30D MA at $882.97.News vs. Options: Do Fundamentals Align?

Costco’s Q1 2026 results were a mixed bag. The 8.2% sales growth and $4.50 EPS beat expectations, but the P/E of 47 feels stretched. Analysts like Telsey and Morgan Stanley are still bullish, citing membership growth and digital expansion. However, the recent sell-off (3% in three days) and bearish MACD (-11.06) suggest the market is pricing in short-term margin pressures. Here’s the catch: the options data mirrors this tension. Heavy call buying at $915 reflects faith in Costco’s long-term moat, while the puts at $845 hedge against near-term profit-taking or inflation-driven margin compression.

Actionable Trade Ideas: Calls, Puts, and Price Levels

For options traders, consider these setups:

• Bullish Play: Buy COST20260109C915 if COST closes above $863 (intraday high). Target a 6.4% move to $915, with a stop-loss below $854.34.
• Bearish Hedge: Buy COST20260109P845 if the stock dips to $855.09 and tests support. Target a 6.3% rebound to $845, with a tight stop at $855.78.

For stock traders, here’s the plan:

• Entry near $854.34 (support level) if RSI (42.77) breaks above 45. Target $884.49 (resistance) or $909.69 (Bollinger Upper Band).
• Exit above $882.97 (30D MA) to lock in gains, or hold for the $924.66 (100D MA) if the 200D MA ($950.86) is breached.

Volatility on the Horizon: What to Watch

Costco’s path hinges on two factors: membership renewal rates and e-commerce growth. If the stock holds above $854.34, the bulls could push toward $909.69. But a breakdown below $837.79 (Bollinger Lower Band) would validate the bear case. The key takeaway? This is a stock with structural strengths but technical headwinds. The options market is pricing in a $845–$915 range for next Friday, so trade within that bracket—or risk getting squeezed by the 200D MA’s gravitational pull.

Final Thought: Costco isn’t a one-way bet. But if you’re willing to play the range, the options data and fundamentals align on one thing: patience pays off here. The question is, are you buying the dip or hedging the volatility?