Dialight (DIA) Options Signal Key Bullish Setup: Focus on $504 Call and $490 Put as Volatility Nears Expiry

• DIA trades at $492.93, down 0.6% from $495.90 close.
• Options put/call ratio hits 2.09 (put OI dominates), but MACD and RSI hint at bullish momentum.
• Bollinger Bands show price near upper bound ($496.43), with 30D support at $483.25.
• No major block trades today, but OTM options suggest a volatile expiry ahead.

Here’s the thing: DIA’s options market is sending mixed signals. While puts dominate open interest, the technicals and call options at $504 suggest a potential upside breakout. Let’s break it down.

OTM Options Show Bearish Skew, But Bulls Have a Plan

Put open interest is crushing calls right now—358K puts vs 171K calls. The top OTM puts for Friday (Jan 16) are clustered at $490 ($OI: 483) and $482.5 ($OI: 394), while calls peak at $504 ($OI: 1,269). This means a lot of traders are hedging for a drop or betting on a sharp decline. But here’s the twist: the $504 call has 3,740 OI for this Friday, and the RSI at 70 (overbought) suggests a test of the upper Bollinger Band ($496.43) is likely. If bulls push past $504, the short-term bearish sentiment could flip.

The lack of block trades today is neutral—no whales are moving the needle. But the heavy put OI at $490 ($OI: 483) for next Friday (Jan 23) implies some traders are bracing for a pullback. If DIA holds above its 30D support ($483.25), the puts might expire worthless.

No News, But Options Tell a Story

There’s no recent company news to drive sentiment, which means the options activity is the main narrative. Without earnings or product announcements, traders are reacting to technicals and broader sector trends. The long-term bullish Kline pattern and 200D MA at $447.74 (far below current price) suggest the stock is in a multi-month uptrend. But without positive news, the rally could stall if the $490–$492 range breaks.

Trade Ideas: Calls for Short-Term Gains, Puts for Hedging

For options:

• DIA20260116C504 (Jan 16 $504 call): Buy if DIA closes above $500 by expiry. With the upper Bollinger Band at $496.43, a breakout here could trigger a rally to $504+.
• DIA20260123P490 (Jan 23 $490 put): Buy if DIA dips below $492.04 (intraday low). The $490 strike is a key psychological level with heavy OI.

For stock:

• Entry near $483.25 (30D support): If DIA holds above this level, target $504 (call strike) as a short-term goal.
• Stop-loss below $480: A break here would validate bearish sentiment, making puts more attractive.

Volatility on the Horizon: Bulls and Bears Clash as DIA Approaches Key Expiry

The next 48 hours will test DIA’s resolve. A close above $500 would validate the call-heavy bets at $504, while a drop below $490 could trigger a wave of put buyers. Either way, the 2.09 put/call ratio means the market is pricing in downside risk—but technicals suggest the bulls still have momentum. If you’re trading options, focus on the Jan 16 expiry first; for longer-term plays, the Jan 23 $495 call (DIA20260123C495) offers a cheaper entry if the stock consolidates.

Bottom line: DIA is at a crossroads. The options market is split, but the technicals lean bullish. Your move? Pick a side—or hedge with a collar strategy using the $490 put and $504 call. Either way, don’t ignore the expiry dates. Time is running out.