Home Depot (HD) Options Signal Aggressive Bullish Play at $420 as RSI Dips Below 30

Quick Take

• Home Depot (HD) trades at $364.03, down 1.1% with volume surging to 1.61M shares.
• Options market shows 0.72 put/call open interest ratio, with heavy call OI at $420 strike.
• Earnings on Nov 18 and a $5.5B GMS acquisition fuel bullish momentum ahead of key support/resistance levels.

Here’s the core insight: HD’s options activity and technicals are painting a clear picture—traders are aggressively buying calls at $420 strike, while RSI near oversold territory and a pending earnings report set up a high-probability breakout scenario. Let’s break it down.Bullish Fireworks in the Options Market

HD’s options chain is a treasure map for where big money is moving. This Friday’s expiring calls show heavy open interest at $410 ($3,756 contracts) and $395 ($3,169), but the real fireworks are in next Friday’s chain: $420 ($11,226 OI) and $450 ($6,993 OI) strikes dominate. That’s not just noise—it’s a signal.

Why does this matter? When institutional players pile into OTM calls at such levels, they’re betting on a sharp rebound. The put/call ratio of 0.72 (calls outweighing puts) reinforces this. But don’t ignore the risks: if HD fails to hold above $366.98 (200D support), the $355 put strike ($2,145 OI) could see a rush for cover.

Earnings and Acquisitions: Fuel for the Bull Case

Bank of America’s $450 price target and the GMS acquisition story are no coincidence. The $5.5B buyout isn’t just a number—it’s a strategic move to dominate Pro contractor services, a segment with sticky margins.

Here’s the kicker: the market already priced in some of this. HD’s 1.3% expected Q3 sales growth isn’t earth-shaking, but the $450 call OI suggests traders see a path to that level by year-end. The earnings report on Nov 18 could be the spark. If results beat estimates, the $395–$400 range (current 30D/200D support/resistance) might flip from battleground to breakout zone.

Actionable Trade Ideas: Calls, Stock, and the Sweet Spot

1. Options Play: Buy the $420 call expiring Nov 22 (OI: 11,226). Why? The strike sits just below the Bollinger Upper Band ($395.55) and aligns with BofA’s $450 target. If HD closes above $395 by Nov 22, this call gains exponential value.
2. Stock Entry: Consider buying HD near $366.98 (200D support). If it holds, target $395 (Bollinger Upper Band) as a short-term goal. A break above $385 (30D support) would validate the bullish case.
3. Bear Hedge: For caution, sell a put spread at $355 (short) and $340 (long). If HD tanks below $364.44 (lower Bollinger Band), this caps downside risk while letting you keep the premium.

Volatility on the Horizon

HD’s chart is a tightrope walk between oversold RSI (28.77) and a crowded call strike at $420. The next 10 days will test whether the market sees this as a buying opportunity or a warning sign.

Here’s the bottom line: If earnings beat and the $366.98 support holds, HD could rocket toward $400. But if the $355 put strike sees a surge, that’s a red flag. Either way, the options market has already priced in a binary outcome—this is your chance to pick a side before the verdict.