Costco (COST) at a Pivotal Point: Calls Near $1100 vs Puts at $940 Suggest a Bullish Setup for This Friday

• Costco trades slightly below today’s open at $1001.16. • Call open interest is heavily stacked at $1100 and $1080 with this Friday's expiry. • Puts at $940 show cautious bearish positioning but lack dominance. • RSI hovers around 51, while Bollinger Bands suggest a potential upward breakout.

Here’s the deal: Options market sentiment and technicals are pointing in the same direction—COST is setting up for a potential bullish move. The key will be whether it can break above $1010 and hold the $1005 level.

Calls Outnumber Puts as Bullish Sentiment Builds

If you look at the OTM call options expiring this Friday, the top five open interest strikes are at $1100, $1080, $1100, $1040, and $1140. That means a lot of money is being put down by option traders expecting Costco to rise above $1000 by Friday.

Conversely, the top OTM puts are clustered around $940 and $950—lower than the current price. While this shows some bearish positioning, it's not as aggressive as the calls, which hints at a net bullish bias. The call/put open interest ratio is at 1.03, meaning calls still have the edge.

No big whale trades have moved the needle today, but the sheer volume of open interest at these strike levels suggests that institutional or savvy traders are building positions ahead of expiry. And since the stock is trading in a tight range today, those calls could be in play if a breakout happens by Friday.

Company News Adds Fuel to the Bullish Fire

Costco has been on a tear with recent news that bodes well for the stock. The company just reported strong Q4 earnings, announced a $1.5 billion warehouse acquisition in the U.S., and plans to expand into Indonesia and the Philippines by the end of 2026.

On top of that, Costco is investing heavily in AI, logistics, and e-commerce, all of which are long-term tailwinds. The stock buyback of up to $2.5 billion also boosts investor confidence.

There's some noise—like the DOJ antitrust inquiry—but it doesn't seem to have stuck. The stock’s fundamentals are solid. If the news keeps flowing like this, it's only a matter of time before the stock starts to reflect that in its price action.

Specific Trade Ideas for Today: Calls, Puts, and the Stock Itself

If you're looking to play this setup, here are a few options:

• For Options Traders:
• Long Call at COST20260320C1080: With open interest at 1995, this strike is a sweet spot for a bullish bet. Entry should be under $1010.
• Protective Put at COST20260320P940: Open interest at 1764 suggests some hedging interest. This gives downside protection in case of a last-minute pullback.
• Next Friday Call at COST20260327C1020: Open interest is lower here at 186, but with more time to expiry, this is a slightly safer bet if you expect a slower breakout.

• For Stock Traders:
• Entry Zone: Consider entry near $995–$1000, where the 30D support line sits. If COST can hold above $998.21 (the middle of the Bollinger Band), it's a strong signal that the bulls are in control.
• Target Zone: Look for a move up to $1015–$1020 as the upper Bollinger Band is at $1016.46. If it breaks there, the $1040 call options may start seeing action.
• Stop Loss: Place a hard stop below $990 to protect against a bearish reversal.

Volatility on the Horizon as Costco Nears a Breakout Point

Costco is sitting at a crossroads. Technically, it's in a tight range but showing bullish signs with the Kline pattern showing a short-term bullish trend and MACD nearing a potential crossover. With call volume stacked at $1100 and news pushing in the same direction, the odds are leaning toward a move up.

The next few days—especially this Friday—could be crucial. If the stock breaks out of the Bollinger Band range and holds above $1000, it’s likely to see continued upward momentum. If not, the $995 support will be a key level to watch.

So here’s what you do: Watch the action between now and Friday. If the stock holds the 998.21 support and starts to show strength, the calls at $1080 and $1040 are on. If it breaks through, you could see a rally into the $1015–$1020 range.

And if you're still on the fence, remember—options give you the flexibility to play this without holding the stock outright. Either way, there's a clear trade path to follow.