HD Options Signal Bullish Bias: Key Strikes and Trade Setups for Dec 26–Jan 2 Expiry

• HD trades at $347.34, up 0.69% intraday, with RSI at 39.13 and MACD crossing above its signal line.
• Open interest shows 122,327 calls vs. 103,009 puts (ratio: 0.84), with heavy call buying at $357.5 and $360 strikes.
• Analysts are split: Telsey raises PT to $430, while Bernstein warns of macro risks.

The options market is whispering a cautious bullish story for HD, but the technicals and news add layers of nuance.Where Bulls and Bears Are Betting: OTM Options and Sentiment

The options chain tells a tale of optimism. For next Friday’s expiry (Dec 26), the HD20251226C3575 call has 2,864 open contracts—the highest of any strike. This suggests a quiet consensus that HD could test $357.5 before year-end. Meanwhile, the HD20251226C360 (1,351 OI) and HD20251226C355 (492 OI) strikes add depth to the bullish case.

On the put side, the HD20251226P340 (474 OI) and HD20251226P345 (350 OI) strikes show modest hedging activity, but nothing to signal panic. The lack of block trades means no whale-sized bets are distorting the market.

News That Could Tilt the Scales

The recent securities lawsuit over Q3 earnings adds a cloud. If the investigation uncovers material misstatements, HD could face a short-term selloff. But institutional buying—like Farther Finance’s 15.6% position increase—counterbalances this risk. Analysts like Telsey see a path to $430 if storms return and rates cut in 2026, but Bernstein’s “Hold” rating keeps the powder dry for now.

Actionable Trade Ideas for HDFor Options Traders:

• Bullish Play: Buy the HD20251226C3575 at $347.34. If HD breaks above its 20-day EMA ($352.99), this strike could gain steam. Exit at breakeven ($357.5) or hold for a $365 target.
• Bearish Hedge: Sell the HD20251226P340 if HD dips below $344 (lower Bollinger Band). A close below $340 would validate the short-term bearish trend.

For Stock Traders:

• Long Entry: Consider buying HD near $344 if it holds above the lower Bollinger Band. First target: $357.5 (call-heavy strike). Second target: $365 (200D MA at $373.38 is a stretch).
• Stop-Loss: Below $343.9 (intraday low) would invalidate the bullish case.

Volatility on the Horizon

HD’s path hinges on three factors:

1. Legal Risks: The lawsuit could trigger a gap down if new details emerge.
2. Macro Clarity: A Fed rate cut in early 2026 would supercharge the Pro business.
3. Options Expiry Flow: The heavy call OI at $357.5 suggests a self-fulfilling prophecy if buyers push the price there.

Final Take: HD is in a tightrope walk between institutional confidence and macro uncertainty. The options market leans bullish, but the lawsuit and RSI at 39.13 (oversold territory) mean caution is warranted. For now, the $344–$357.5 range is the battleground. Trade with a plan, and keep an eye on the 200D MA—it’s a psychological wall that could define 2026.