Costco (COST) Options Signal Bullish Bias: Targeting $950+ as Calls Dominate Open Interest Amid Expansion Hype

• Costco’s stock (COST) trades at $940.34, down 0.29% from its previous close, but technical indicators hint at a short-term bullish trend.
• Options market data shows a call-heavy bias, with the put/call open interest ratio at 0.835 and heavy call OI at $950 and $1000 strikes for next Friday’s expiration.
• Recent news of new warehouse openings and strong Q1 2026 sales has fueled investor optimism, aligning with the options-driven bullish setup.

Here’s the core insight: COST is showing upside potential. The combination of a short-term bullish Kline pattern, overbought RSI (79.26), and call-heavy options positioning suggests traders are pricing in a breakout above key resistance. The risk? A pullback below $930 could trigger short-term profit-taking, but the long-term story remains intact.

Bullish Sentiment Locked in OTM Calls, Puts Guard Against Dips

Let’s break down the options data. For this Friday’s expiration (Jan 16), the top OTM calls are clustered at $1600 (OI: 5188), $1000 (OI: 2653), and $950 (OI: 2003). These strikes are wildly out of the money, but the sheer volume suggests speculative positioning for a massive move—perhaps driven by hype around Costco’s expansion plans. Meanwhile, the top OTM puts are at $860 (OI: 2306) and $900 (OI: 2305), indicating some hedging against a drop below the 200D MA ($950.32).

For next Friday’s expiration (Jan 23), the action narrows. The $950 call (OI: 389) and $940 call (OI: 346) are the most watched, with the $950 strike sitting just above today’s price. This suggests traders are betting on a push above the 200D MA, which could validate the long-term bullish case. The put side has the $855 (OI: 293) and $850 (OI: 288) strikes as key levels to watch for downside protection.

No major block trades were reported today, so we’re not seeing institutional whales moving the needle. That’s both a relief and a warning: retail-driven rallies can be volatile, but the lack of heavy institutional selling is a positive sign.

News Flow Fuels the Bull Case—But Watch for Overheating

Costco’s recent headlines are a goldmine for bulls. The new warehouse in South Los Angeles and the Des Plaines project signal aggressive expansion in high-growth urban and suburban markets. Coupled with Q1 2026 sales acceleration and a 92.2% membership renewal rate, the fundamentals are strong.

But here’s the catch: the stock has already rallied 3.7% on strong December sales. The options market is pricing in more of the same—can Costco keep up the momentum? If the company misses on future guidance or faces supply chain hiccups, the overbought RSI (79.26) could trigger a correction. For now, though, the news and options data are in sync.

Actionable Trade Ideas: Calls for the Breakout, Puts for the Safety Net

For options traders, the most compelling setup is the COST20260123C950 call (expiring Jan 23). With the stock trading at $940.34, a move above $950 would test the 200D MA and validate the bullish case. If you’re bullish but cautious, pair this with a COST20260123P850 put to hedge against a drop below key support.

For stock traders, consider entry near $930 if the price holds above the 30D MA ($883.58) and 200D MA confluence. A breakout above $950 could target $965–$980, while a breakdown below $925 would signal caution.

Volatility on the Horizon: Position for the Next Move

Costco’s story isn’t just about numbers—it’s about strategic expansion and consumer loyalty. The options market is pricing in a breakout, and the fundamentals are there to support it. But remember: overbought conditions and speculative call buying can lead to sharp corrections if expectations aren’t met.

Bottom line: This is a high-conviction bullish setup. If you’re in, lock in the COST20260123C950 call and watch the $950 level like a hawk. If you’re on the sidelines, wait for a pullback to $930 before entering. Either way, Costco’s next move could be a big one—and the options market is already betting on it.