Home Depot (HD) Options Signal Bullish Bias: Target $380 Call Play Amid AI-Driven Momentum

• Home Depot (HD) trades at $377.92, up 0.52% with volume surging past 1 million shares.
• Options market shows heavy call open interest at $380 and $385 strikes, while puts dominate at $350–$355.
• AI-driven retail upgrades and housing policy optimism fuel short-term bullish momentum.

Here’s the takeaway: HD’s options activity and technicals point to a high-probability upside breakout. The stock is perched near a 30D support level ($344.80) and a 100D moving average ($378.42), with RSI flirting with overbought territory (78.77). But the real signal lies in the options—call open interest is 147,139 vs. 124,256 puts, a 0.84 ratio favoring bulls. If you’re betting on a short-term pop, the $380–$385 range is where the action lives.

Bullish Sentiment Locked in OTM Calls, Puts as a Safety Net

The options chain tells a clear story: traders are pricing in a push toward $380–$385 by Friday (1/16). The top OTM calls for this week include HD20260116C380 (OI: 2,704) and HD20260116C385 (OI: 3,720), while puts at $350 (OI: 4,090) and $355 (OI: 3,815) act as a floor. This isn’t just noise—the $385 call has 3,720 contracts open, suggesting institutional players are hedging or betting on a pop. Meanwhile, a block trade of 500 HD20260123C385 calls ($124,500 turnover) hints at a longer-term bullish bet.

But don’t ignore the puts. The $350–$355 puts (OI: 4,090–3,815) signal a psychological floor. If HD dips below $375, those puts could trigger a rebound. The key risk? A breakdown below $365 (lower Bollinger Band at $330.43 is extreme), but that’s a stretch given the 30D support at $344.80.

AI and Housing Policy Fuel the Narrative

Home Depot’s recent news isn’t just background noise. The rollout of Rilla’s AI coaching tools and Google Cloud’s Magic Apron are tangible upgrades to operational efficiency. Analysts like Jim Cramer and market rotation into value stocks (vs. tech) are amplifying this. The Trump housing policy buzz adds a macro tailwind—lower rates could boost home improvement demand, and HD’s 100D MA at $378.42 aligns with this thesis.

But here’s the catch: the Supreme Court’s delayed tariff ruling still looms. If tariffs tighten, HD’s margins could face pressure. However, the options data shows more conviction in the upside, so for now, the AI and housing narrative is winning.

Actionable Trade Ideas: Calls for Short-Term Gains, Stock for Positioning

For options traders: Buy HD20260116C380 (strike price $380, expiring Friday) with a target at $385. The RSI suggests a pullback is unlikely, and the 30D support at $344.80 gives you a margin of safety. If you want a longer play, HD20260123C385 (OI: 3,720) could capitalize on the AI-driven momentum into next week.

For stock buyers: Consider entry near $375 (today’s low) with a target at $385. A stop-loss below $365 would protect against a breakdown. The 200D MA at $373.31 is a critical level—if HD holds above that, the bullish case strengthens.

Volatility on the Horizon: Balancing AI Optimism and Macro Uncertainty

The next 72 hours will test HD’s resolve. A close above $380.13 (intraday high) could trigger a rally toward $390, but keep an eye on the $350–$355 put-heavy zone. The block trades on HD20260123P372.5 (500 contracts) suggest some hedging activity, but the overall bias remains bullish. If the Supreme Court rules on tariffs by next week, that could add a twist—stay nimble.

Bottom line: HD’s options and fundamentals are aligned for a short-term pop. The AI narrative, housing policy tailwinds, and call-heavy positioning make $380–$385 the sweet spot. But don’t ignore the puts—$350 is a psychological floor to watch. For now, this is a stock where the market is betting on a breakout, and the data says: place your bets.