HD Brushes Off Bull Notes, Options Bears Buy in

Puts are running at double their usual volume today

Deputy Editor
May 11, 2021 at 1:31 PM
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Home Depot Inc (NYSE:HD) is slipping today, despite price-target hikes from Morgan Stanley and J.P. Morgan Securities to $340 and $355, respectively. Investors are also awaiting the company's first-quarter earnings, due out before the open next Tuesday, May 18.

At last check, the security was down 3.5% to trade at $329.27, just one day after its all-time high of $345.69. However, HD's 20-day moving average, which the security bounced off before its rally to those highs, appears to be containing today's pullback. Meanwhile, HD's Relative Strength Index (RSI) of 76 is firmly in "overbought" territory, meaning a short-term breather could be coming up for the security. 

HD 0511

Options bears have been quick to chime in during today's trading. So far, 32,000 puts have crossed the tape, double what's typically seen at this point. The weekly 5/14 325-strike put, where new positions are being opened, is seeing the most activity. 

This penchant for puts has been the norm of late, as per HD's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all but 1% of readings from the past year. This means long calls have been picked up at a much faster-than-usual rate during this time. 

 

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