Costco's Options Signal Bullish Momentum: Key Strike Levels and Trade Setups for Jan 23, 2026

• Current price: $980.43, up 0.44% from yesterday's close
• Put/Call open interest ratio: 0.88, favoring calls
• RSI near overbought territory (86.0) with price near Bollinger Bands upper bound

Here’s the takeaway: Costco’s options market and technicals are painting a clear picture. The stock is perched on a short-term bullish trend, with heavy call open interest at the $1000 strike and a put/call imbalance hinting at a potential upside breakout. But let’s dig deeper—because not all bullish setups are created equal.

The Call-Put Imbalance and What It Reveals About Market Sentiment

Looking at this Friday’s options chain, the COST20260123C1000 call has the highest open interest (2218 contracts), nearly double the next strike. That’s a big bet: traders are pricing in a possible pop above $1000 before expiration. Meanwhile, puts are clustered at the $910–$930 range, with the COST20260123P910 put leading at 1168 OI. This isn’t just noise—it’s a split-level playbook. Bulls are hedging for a rally, while bears are bracing for a drop below $940 (the 200D MA support zone). The key? Volume. With 680K shares traded today, the market is testing whether Costco can break out of its long-term range. And right now, the RSI and MACD are both screaming "higher"—but not without risk.

No Major News, But Technicals Tell a Story

There’s no recent headlines to anchor this move, which means the options activity is the main driver. That’s both a blessing and a warning. Without fundamental catalysts, the rally hinges on technical levels holding. If the stock cracks above the intraday high of $984.75, it could trigger a cascade of call options at $1000. But if it falters below the 30D support at $884.54, the puts at $910–$930 could turn into a bloodbath for short-term bulls. Think of it like a seesaw: the technicals are tilted bullish, but the absence of news means volatility could swing wildly.

Actionable Trade Ideas: Calls, Puts, and Precision Entries

For options traders: The COST20260123C1000 call is your high-conviction play if you’re betting on a breakout. With the stock already at $980, a pop to $1000 would give this strike ~2% leverage. For a safer bet, consider a bull call spread using the COST20260123C990 and COST20260123C1000 strikes. If you’re bearish, the COST20260123P920 put (next Friday’s expiration) offers downside protection without overpaying.

For stock traders: A precise entry near $975–$980 makes sense if the 200D MA ($950.92) holds. Your first target? The Bollinger Bands upper bound at $1001.52. A stop-loss below $941 (the 200D support zone) would be prudent. For a longer-term angle, the COST20260130C1000 call could lock in gains if the rally extends into next week.

Volatility on the Horizon: What to Watch

Costco isn’t breaking out of a range for fun—it’s testing whether the market sees it as a safe haven in a volatile macro environment. The RSI’s overbought level is a red flag, but the MACD’s positive histogram (+9.35) suggests momentum isn’t dead yet. The real test? This Friday’s expiration. If the COST20260123C1000 call expires in the money, it could validate the bullish thesis. If not, the puts at $910–$930 might force a reevaluation. Either way, the next 48 hours will tell us if this is a fleeting pop or the start of something bigger.