MSFT Options Signal Bullish Bias: Key Strikes and Block Trades Point to $450 Support and $500+ Upside Potential

• MSFT trades at $466.70, down 2.2% on heavy volume (16.3M shares).
• RSI at 38.87 (oversold) and MACD near zero hint at potential rebound.
• Call open interest dominates at $520 and $700 strikes, while puts cluster at $450.
• Block trades show big put selling at $470, suggesting institutional confidence in support.

The options market is whispering a story of cautious optimism. Despite today’s drop, the call/put imbalance and block trades imply traders are hedging downside while eyeing a rebound above $465. Here’s how to read the tea leaves.Bullish Sentiment in Options and Block Trades

Let’s start with the numbers: 34,067 open calls at the $520 strike (this Friday’s expiry) and 20,520 puts at $450 scream for attention. The put/call ratio of 0.7 (calls > puts) isn’t just a statistic—it’s a signal that big money is pricing in a rebound. But don’t ignore the block trades. The sale of 360+ puts at $470 (expiring Feb 20) suggests institutions are locking in downside protection, likely expecting a bounce off $450–$460.

The $450 level is critical. If MSFT breaks below $465, those puts could trigger a short-term rally. But watch for a trap: the 200D MA at $480.66 is a psychological hurdle. A close above $481 would validate the long-term bullish case, but today’s price action shows no signs of that yet.News and Market Narrative

Microsoft’s recent headlines are a mixed bag. The community-driven AI plan and energy cost pledges aim to calm local pushback, but Trump’s comments on utility costs have spooked investors. Here’s the twist: while the news explains today’s drop, it also creates a buying opportunity. Analysts still rate MSFT as a Buy, and the $35B in Q3 AI investments show the company isn’t backing down.

The real question is: Will the market trust Microsoft’s promises? If the stock holds $465, the news could fade into the background. But if it breaks below $450, the bearish narrative takes over. The options data leans toward the former—call OI at $500 (next Friday’s expiry) suggests some are already pricing in a rebound.Actionable Trade IdeasFor options traders: Buy the MSFT20260123P460 (next Friday expiry) if MSFT closes below $465. Target a $450 rebound. For bulls, the MSFT20260116C500 (this Friday expiry) offers a high-risk, high-reward play if the stock breaks $475.For stock traders: Consider entry near $465 if the 30D support at $478.22 holds. First target: $480 (middle Bollinger Band). Second target: $490 (200D MA). Stop-loss below $455 to protect against a breakdown.Volatility on the Horizon

This week’s options expiries (Jan 16 and 23) will test Microsoft’s resolve. The block trades and OI suggest a $450–$500 trading range is likely, but a break above $480 would signal a shift. Keep an eye on the RSI: if it crosses 50 with volume, the bulls might reclaim control. For now, the data says: defensive bullishness—protect downside, but don’t bet the farm on a rebound. The AI story isn’t over, but patience is key.