The Home Depot (HD) Options Signal a Bullish Setup: Targeting $400+ with Strategic Call Plays

• The Home Depot (HD) trades at $370.2, just 0.3% above its open, with Bollinger Bands suggesting a potential rebound from the lower band at $370.82.
• Options data shows a 0.69 put/call open interest ratio, with heavy call interest at $400 and $410 strikes expiring next Friday.
• RSI at 23.86 and oversold conditions hint at a possible short-term rebound, while long-term moving averages (30D/200D) remain above current price.
• Upcoming Q3 earnings on Nov 18 and new product partnerships could catalyze a breakout.

Here’s the core insight: options market sentiment and technical indicators are aligning for a bullish bias, with heavy call open interest at $400+ strikes suggesting big money is pricing in a sharp move. While the short-term trend is bearish, the oversold RSI and key support levels near $367.50 create a low-risk entry zone for those betting on a rebound.

The Call-Put Imbalance and Where Big Money Is Betting

Let’s start with the options data. For Friday’s expiration, the top call strikes are clustered between $385 and $410, with the $400 strike (OI: 3,683) and $390 (OI: 1,191) leading the pack. Next Friday’s chain amplifies this bullishness: the $410 strike (OI: 3,869) and $395 (OI: 3,218) dominate, showing a clear preference for high-strike calls.

This isn’t random. When you see such a lopsided call/put ratio (0.69), it means traders are either hedging against a rally or outright betting on a breakout. The $400 and $410 strikes act like a "strike wall"—if HD cracks $378.91 (30D support/resistance), these calls could ignite.

On the put side, the highest open interest is at $365 and $370, which are 4–5% below the current price. While this suggests some downside protection is being bought, the relatively low put volume (vs. calls) implies bearish sentiment isn’t strong enough to counter the bullish setup.

No block trades means no major institutional moves to worry about—this is retail and smaller institutional money driving the call frenzy. But here’s the risk: if HD fails to break above $378.91, the heavy call interest could backfire, creating selling pressure as options expire worthless.News Flow: Partnerships and Earnings as Catalysts

The recent headlines are a mixed bag. The $30 million veteran housing investment and Ecolab partnership are positive for brand image but unlikely to move the stock alone. However, the November 18 earnings call is a critical wildcard.

Options traders are pricing in a potential earnings-driven rally. If HD beats estimates (as it has historically), the $395–$410 call strikes could become highly liquid. The hurricane relief pledge and product launches (like hOmeLabs dehumidifiers) add to the "story," but the real catalyst will be Q3 results.

Investor perception matters here. If the market views the earnings as a sign of resilience in a slowing economy, the $400+ call strikes could see explosive demand. But if guidance is weak, the puts at $365–$370 might gain traction.

Actionable Trade Ideas: Calls for Aggressive, Stock for Cautious

For options traders: Buy the $400 call expiring next Friday (OI: 3,869). Why? The strike is 8.3% above the current price, but with RSI at oversold levels and support near $367.50, a rebound to $385–$400 feels plausible. If HD breaks $378.91 (the 30D support/resistance), this call could multiply in value.

Alternatively, a bull call spread using the $370 (OI: 544) and $400 strikes could limit risk. The $370 put also offers a safety net if you’re long the stock.

For stock traders: Consider entry near $370.2 if the price holds above $367.50. Set a target at $385 (middle Bollinger Band) and a stop-loss below $365. If HD closes above $378.91 by Nov 18, re-evaluate for a push toward $400.

Volatility on the Horizon

The key takeaway? HD is sitting at a crossroads. The technicals and options data suggest a short-term rebound is likely, but the long-term ranging pattern means this could be a false breakout. The November 18 earnings report will be the ultimate test.

If you’re bullish, the $400 call is your best bet for a high-reward, time-bound play. If you’re cautious, wait for a confirmed break above $378.91 before committing. Either way, the market is pricing in a story of resilience—and that’s a narrative worth watching closely.