Home Depot (HD) Options Signal $410 Bullish Bias: Here’s How to Position for the Upcoming Catalysts

• The Home Depot’s options market is heavily skewed toward calls, with 3,899 open contracts at the $410 strike (Friday expiry) and 2,929 at the same level for next Friday.
• Technical indicators like the Kline pattern and RSI suggest a short-term bullish trend, while the stock trades near its 200-day moving average ($382.05).
• Recent news includes the completed $5.5B GMS acquisition, reaffirmed FY2025 guidance, and a $10M investment in skilled trades training—factors that could drive long-term value.

Here’s the core insight: Home Depot’s options market is pricing in a strong upside bias, with heavy call open interest at $410 and $400 strikes. The stock’s current price near $391.17, combined with a bullish technical setup and strategic catalysts, suggests upside potential—but not without risks. Let’s break it down.

Bullish Calls at $410 and $400: A Playbook for Breakouts

The options data tells a clear story. For Friday expiry, the $410 call has 3,899 open contracts—the highest among OTM calls. Next Friday’s $410 call isn’t far behind at 2,929. This concentration of call open interest suggests institutional or large retail players are positioning for a price push above $410. Why? Because that’s where the 30-day resistance level (422.47–423.42) starts, and the Bollinger Upper Band is at $413.75.

But it’s not just about calls. The put open interest is lower, with the $387.5 strike (Friday expiry) at 936 contracts. That’s a red flag for bears: if the stock dips below $389.12 (today’s intraday low), the $387.5 put could act as a temporary floor. However, the put/call ratio of 0.765 (calls dominate) means the market is more confident in the upside.

Block trades? None. That’s interesting. No large institutional trades to watch for, so the focus stays on the options data. The takeaway? The market is betting on a breakout above $410, but a drop below $389.12 could trigger panic.News Flow: GMS Acquisition and Guidance Reaffirmation Fuel Optimism

The GMS acquisition is the big win here. By acquiring a specialty building products distributor, Home Depot is expanding its pro contractor footprint—a segment that’s resilient even in soft housing markets. The $5.5B deal was finalized after clearing regulatory hurdles, and the company extended its tender offer to September 3, 2025. That’s a vote of confidence in the integration timeline.

Goldman Sachs and Zacks Research are both bullish. Goldman maintains a Buy rating with a $444 price target, while Zacks raised its 2027 EPS estimates to $16.31. But there’s a catch: Zacks also cut its Q1 2027 EPS forecast to $3.87, citing margin pressures and softer demand.

The stock’s recent 3% rally on Q2 results—despite missing EPS estimates—shows investors are prioritizing long-term guidance over short-term misses. The key question: Will the GMS integration and pro contractor demand offset near-term margin pressures? The options market seems to think yes.

Actionable Trade Ideas: Calls at $410 and a Bullish Stock Setup

For options traders: Buy the $410 call expiring next Friday (OI: 2,929). Why? The stock is already trading near $391.17, and a breakout above $393.05 (today’s intraday high) could trigger a rally toward $410. The RSI at 43.10 suggests oversold conditions, and the MACD histogram is turning positive. If the stock closes above $410 by next Friday, the call could see a 20%+ gain.

For stock traders: Consider entry near $391.17 if support holds above $389.12. Set a target at $400 (30-day moving average) and a stop-loss below $387.5. If the stock breaks $400, re-evaluate for a move toward $410.

Bearish hedge? The $387.5 put (Friday expiry) could offer protection if the stock dips, but the low put/call ratio suggests limited demand for downside hedges.Volatility on the Horizon: A Bullish Outlook with Caution

The GMS acquisition and reaffirmed guidance are tailwinds, but the stock isn’t in a vacuum. The 200-day moving average at $382.05 is a critical support level. If the stock holds above that, the bullish case remains intact. However, a drop below $367.51 (200D support) would invalidate the current setup.

The options market is pricing in a $410+ move, but that’s not guaranteed. The key catalysts to watch: the September 3 tender offer deadline for GMS and the September 3 Goldman Sachs conference presentation. If Home Depot delivers a compelling long-term roadmap, the stock could surge. If not, the $387.5–$389.12 range might become a battleground.

In short: This is a high-conviction bullish setup, but it’s not without risks. The options data and technicals align with the news flow, but margin pressures and housing market headwinds could derail the rally. Position accordingly—and keep an eye on that $410 level.