The Home Depot, Inc. (HD) Option Bulls Eye More Upside

Call players active as Home Depot Inc (NYSE:HD) has another big day

by Karee Venema

Published on May 8, 2015 at 3:09 PM
Updated on Jun 24, 2020 at 10:16 AM

Home Depot Inc (NYSE:HD) helped lead the Dow higher yesterday, and it's just more of the same today. In fact, the equity is up 2.4% at $112.71, and call players are responding in kind. In fact, calls are crossing at three times the average intraday rate, and outpacing puts by a nearly 3-to-1 margin.

Receiving notable attention is HD's May 113 call, where it appears some buy-to-open activity may be occurring. If speculators are indeed initiating new long positions here, the goal is for HD to rally north of $113 by next Friday's close, when front-month options expire. Today, the stock topped out at an intraday peak of $113.48 shortly after the open.

Expanding the sentiment scope shows short-term speculators are more call-skewed than usual toward the security. HD's Schaeffer's put/call open interest ratio (SOIR) of 0.89 not only indicates call open interest outweighs put open interest among options expiring in three months or less, but it ranks lower than 73% of all similar readings taken in the past year.

On the charts, Home Depot Inc (NYSE:HD) has been a long-term outperformer, boasting a year-over-year lead of 45%. More recently, however, the stock has found itself sandwiched between support at its 120-day moving average and resistance at its 50-day trendline, respectively located at $107.99 and $113.55.

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