Home Depot (HD) Options Signal Bullish Bias: Key Strike Levels and Trade Setups for Dec 5–12 Expirations

• HD surges 1.7% to $360.07, trading above its 30D MA but below the 200D MA
• Call open interest dominates with a 0.85 put/call ratio, highlighting $370 as the most watched strike
• Q3 earnings miss and margin pressures clash with bullish options flow and $403 analyst fair value

The options market is whispering a clear message: traders are leaning hard into Home Depot’s upside potential. With calls outpacing puts and key strike levels aligned with technical pivots, today’s setup offers a rare blend of momentum and structure. Let’s break down what’s driving this bias—and where to position for it.Bullish Sentiment Locked in at $370: Decoding the Options Flow

HD’s options chain tells a story of conviction. This Friday’s $370 call (HD20251205C370) leads with 1,824 open contracts, nearly triple the next strike. Puts, meanwhile, peak at $350 (1,453 OI), suggesting a floor around $350–$355. The 0.85 put/call ratio (based on open interest) isn’t just bullish—it’s aggressively so. Traders are pricing in a potential breakout above $360.40 (intraday high) to test $370, where heavy call OI could create a self-fulfilling prophecy.

But here’s the catch: RSI at 37.9 hints the rally isn’t overextended yet, but the 30D MA ($366.59) looms as a near-term hurdle. If HD fails to hold above $357.97 (middle Bollinger Band), the $347.5–$350 put zone could see a surge in activity. Block trading is quiet for now, but that $370 call pile-up feels like a whale’s footprint—watch for gamma squeezes if the stock gaps higher.

News Flow: Undervaluation Thesis vs. Earnings Reality

Analysts are split between “buy the dip” and “wait for clarity.” The $403 fair value estimate and 2.6% dividend yield (payout ratio: 62.7%) paint HD as a value play. But Q3 earnings—missing estimates by $0.09 and guiding below consensus—add friction. Vanguard’s 10.04% stake and $35.9B institutional ownership (70.86% of shares) suggest long-term confidence, yet the recent 13% 3-month drop shows near-term jitters.

Here’s where options sentiment diverges: the 5,400+ contracts at $367.50 (Dec 5 expiry) align with Yahoo’s $402–$406 price targets. Retail traders are betting on a rebound, while institutions are hedging with puts. The key question: Will softer demand and margin pressures delay the rally, or is this a buying opportunity for the “Moderate Buy” crowd?

Trade Setups: Calls for the Bold, Puts for the Pragmatic

For the aggressive: Buy HD20251205C370 calls at $360.07. If HD breaks $360.40 (intraday high), this strike could see a 20%+ pop by Friday. For a longer play, HD20251212C395 (OI: 581) offers leverage if the stock holds above $357.97.

For the cautious: A put spread (HD20251212P350 + HD20251212P347.5) caps risk while hedging against a drop below $350. Entry near $357.97 (middle BB) with a stop below $353.75 (today’s low) could work for stock buyers aiming for $371–$372 resistance.

Volatility on the Horizon: Positioning for HD’s Next Move

HD’s dance between $350 and $370 will define its near-term fate. The options market is pricing in a bullish resolution, but earnings skepticism and margin pressures add noise. If you’re in, target $375–$400 as profit zones. If you’re out, use the $350–$355 put wall as a liquidity magnet. Either way, this is a stock where options sentiment and fundamentals are colliding—and the next two Fridays could decide which side wins.

One thing’s clear: HD isn’t just trading—it’s telling a story. The question is whether you’re ready to read it.