HD Options Signal Bullish Bias at $420 Call OI Amid Earnings Woes – Here’s How to Play the Rebound

• HD surges 3.7% to $344.66, breaking above 30D MA but stuck below Bollinger Middle Band at $368.90
• Options market shows 0.71 put/call OI ratio (calls dominate), with 11,158 open contracts at $420 call (this Friday’s expiry)
• Earnings miss and weak guidance weigh, but $320–$450 OI cluster hints at potential short-term volatility

Here’s the takeaway: HD’s options activity and technicals paint a mixed but actionable picture. While the stock faces near-term bearish momentum, the heavy call open interest at $420 suggests a potential short-term rebound trade. Let’s break down the numbers and what they mean for your strategy.The OI Imbalance: Bulls vs. Bears in the Numbers

HD’s options chain tells a story of cautious optimism. This Friday’s $420 call ($HD 2025-11-21 C 420) leads with 11,158 open contracts—nearly double the next highest call at $450. That’s not just noise; it’s a bet that HD could rally 22% from current levels. Meanwhile, puts dominate at the $320 strike (2,722 OI), indicating downside protection is being priced in for a 11.5% drop.

The 0.71 put/call OI ratio (calls > puts) leans bullish, but don’t ignore the risk. The RSI at 15.47 and MACD histogram (-3.97) scream oversold, yet the stock hasn’t broken above its 200D MA ($378.20). If bulls can’t push HD past $368.90 (Bollinger Middle Band), the rally might fizzle. Block trading is quiet, so no whale moves to watch—this is retail and institutional options action driving the narrative.

Earnings Woes vs. Options Optimism: What’s the Real Story?

Home Depot’s Q3 report was brutal: 5% EPS guidance cut, weak housing demand, and a 13% YTD stock drop. But here’s the twist: the options market isn’t pricing in a freefall. The $420 call OI suggests traders expect a rebound—maybe from a bounce off the lower Bollinger Band at $335.61 or a short-covering rally.

Consumer sentiment is still shaky, but the GMS acquisition’s $2B incremental sales could be a catalyst. The key question: Will the market focus on the negatives (weak housing, storm sales misses) or the structural growth from GMS? Right now, the options data leans toward the latter—hence the heavy call buying.

Trade Ideas: Calls, Puts, and Price Levels to Watch

For options traders, the $420 call (HD 2025-11-21 C 420) is the most compelling this Friday. If HD closes above $400 by expiry, this call could see 50%+ gains. For a longer play, the $385 call (HD 2025-11-28 C 385) offers a cheaper entry if the stock consolidates.

Bearish? The $330 put (HD 2025-11-21 P 330) is a hedge if the earnings blues return. But with RSI at oversold levels, I’d lean bullish unless HD breaks below $335.61 (lower Bollinger Band).

Stock traders: Consider entry near $368.90 (Bollinger Middle Band) if support holds. Target $400–$420 for a breakout play. If it fails, watch $335.61 as a critical level—break below that, and the $320 put OI could ignite.

Volatility on the Horizon: What’s Next for HD?

The next 72 hours will be critical. HD needs to close above $368.90 to validate the bullish OI setup. A break above $378.20 (200D MA) would shift the narrative from "rebound" to "recovery." Conversely, a drop below $335.61 could trigger a wave of panic selling.

The options market is pricing in a 20% move either way by November 28. That’s your window: play the rebound with calls, or short-term straddles if you expect a sharp move. But don’t ignore the fundamentals—Home Depot’s guidance is still a headwind.

Bottom line: This isn’t a "buy and hold" trade. It’s a tactical play on options sentiment and technical levels. HD’s story is far from over, but the data gives you a clear roadmap to navigate the noise.