HD Options Signal Bullish Breakout Potential: Target $365 Calls as RSI Nears Neutral Zone

• Current Price Action: HD trades at $355.83, up 0.89% with volume surging to 1.36M shares.
• Options Imbalance: Call open interest dominates at $360–$415 strikes, while puts cluster at $340–$350.
• Key Levels: 30D support/resistance at $356.72–$357.73 and 200D resistance at $366.98 loom large.

Here’s the core insight: HD’s options activity and technicals hint at a potential bullish breakout. The stock is perched near its 30D support/resistance zone, with heavy call open interest at $360–$365 strikes suggesting institutional positioning for a rally. But legal risks and mixed analyst ratings mean caution is warranted. Let’s break it down.Bullish Calls vs. Defensive Puts: What the Options Say

The options market is split. For this Friday’s expiration (Dec 19), HD20251219C360 and HD20251219C365 have 1,973 and 1,426 open contracts respectively—showing significant bullish positioning. Yet puts like HD20251219P350 (3,439 OI) and HD20251219P340 (2,847 OI) indicate hedging against a drop below $350. The put/call ratio of 0.867 for open interest leans slightly bearish, but the heavy call OI at $360+ strikes suggests a key inflection point.

No block trades are reported, which means no massive institutional bets to skew the narrative. But the concentration of calls at $360–$365 implies a potential target for short-term bulls.

News vs. Options: Legal Risks vs. Strategic Optimism

The legal investigation into Q3 disclosures could weigh on sentiment, especially after the 6% post-earnings drop. But Truist’s $390 price target upgrade and Home Depot’s creator portal launch (monetizing DIY content) add a counter-narrative. Analysts are split—Telsey cut its target to $430 (still bullish), while RBC downgraded to $366. This mixed bag means the stock could swing wildly between fear and optimism.

The options market seems to price in a middle ground: hedging downside risk (via $350 puts) while betting on a rebound to $365+ if the creator portal and tax refund season drive demand.

Actionable Trade Ideas for TodayFor Options Traders:

• Bullish Play: Buy HD20251219C365 (strike price $365, expiring Dec 19). If HD breaks above $356.72 (30D support/resistance), this call could gain steam. The RSI at 51.48 suggests momentum is neutral, so a breakout here might signal a shift.
• Bearish Hedge: Buy HD20251219P350 to protect against a drop below $350. The Bollinger Band lower bound at $332.46 is far away, but the 30D support at $350.98 is closer.

For Stock Traders:

• Entry Near $350: If HD holds above $350.98 (intraday low), consider entries between $350–$353. Target $365–$375 if the 200D resistance at $366.98 breaks.
• Stop-Loss Below $349: A close below $349.74 (middle Bollinger Band) would invalidate the bullish case, signaling a return to long-term ranging.

Volatility on the Horizon

The next 72 hours will test HD’s resolve. A breakout above $356.73 (30D resistance) could trigger a rally toward $365–$375, aligning with both options positioning and Truist’s $390 target. But the legal investigation and rate-sensitive retail sector mean risks linger. For now, the data leans slightly bullish—but don’t ignore the puts. As always, size your bets to survive the swings.

Final thought: HD is a chess game of legal risks and strategic bets. The options market is pricing for a $365 pivot. Your move.