HD Options Signal Bullish Bias at $357.5 Amid Earnings Pressure—Here’s How to Play the Breakout

• The Home Depot (HD) trades at $340.3, down 0.88% from its previous close, with RSI at 27.57 and MACD (-12.8) signaling oversold conditions.
• Options data shows heavy call open interest at $357.5 (2,861 contracts) and $400 (814), while puts dominate at $310 (2,051) and $330 (711), creating a put/call ratio of 0.85 for open interest.
• Recent news includes a Q3 earnings miss, guidance cuts, and a new AI tool for contractors, but online sales rose 11% YoY.

The market is torn between bearish technicals and a bullish options setup. Here’s how to navigate it.The $357.5 Call Wall and the $310 Put Floor: A Battle for HD’s Direction

Options traders are betting on both sides of the fence. The $357.5 call (expiring Nov 28) has the highest open interest at 2,861 contracts, suggesting a psychological hurdle for bulls. Meanwhile, the $310 put (2,051 OI) acts as a floor for bears. The put/call ratio of 0.85 leans slightly bullish, but the heavy put activity at $330 and $335 (combined 1,259 OI) hints at a potential short-term rebound if the stock tests support near $337.62 (intraday low).

The absence of block trades means no major institutional bets are skewing the data. However, the $357.5 call’s dominance could signal a “buy the dip” mentality if HD bounces off its 200-day MA ($377.85) or the lower Bollinger Band ($332.68). Conversely, the $310 put wall implies a worst-case scenario for bears—if the stock breaks below $332.68, it could accelerate toward $310.

Earnings Pressure vs. Strategic Moves: Can HD’s News Offset Weakness?

The Q3 earnings miss and guidance cuts (5% EPS decline) have rattled investors, but the company’s AI tool for contractors and GMS acquisition offer long-term upside. Online sales growth (11% YoY) and a $2.30 dividend (payable Dec 1) show resilience. However, Stifel’s downgrade to “Hold” and ongoing tariff-driven cost pressures temper optimism.

The key question: Will the market reward HD’s long-term strategy (professional services, AI tools) or punish near-term earnings slumps? The options data leans toward the former—call buying at $357.5 suggests traders expect a rebound before the Nov 28 expiry. But the bearish technicals (RSI at 27.57, MACD bearish crossover) mean a test of the $332.68 support is likely.

Actionable Trades: Calls for Breakouts, Puts for Protection

For options traders, the HD Nov 28 $357.5 Call (OI: 2,861) is a high-probability play if HD closes above $343.71 (intraday high). A breakout here could trigger a rally toward $370, where the next resistance lies. For a safer bet, the HD Dec 5 $370 Call (OI: 1,049) offers leverage if the stock stabilizes.

On the bearish side, the HD Nov 28 $330 Put (OI: 711) is a hedge if the stock dips below $337.62. A close below $332.68 could accelerate toward $310, where the put wall is strongest.

For stock traders, consider entry near $337.62 (intraday low) if the RSI (27.57) triggers a rebound. A short-term target is $343.71 (intraday high), with a longer-term goal at $370 (next resistance). A stop-loss below $332.68 would protect against a breakdown.

Volatility on the Horizon: Balancing Risk and Reward

HD’s price is caught in a tight range between its 200-day MA ($377.85) and lower Bollinger Band ($332.68). The options data and technicals suggest a volatile week ahead. If the stock closes above $343.71, the $357.5 call could surge. A close below $332.68 would validate the bear case, with $310 as a critical floor.

The key takeaway? HD’s near-term direction hinges on whether bulls can reclaim the $343.71 level. For now, the options market is pricing in a bullish bias—but the technicals warn of a potential breakdown. Position yourself with a mix of calls and puts to capitalize on either outcome.