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HD Covered Call Analysis: Proceed With Caution Weak · 35/100
HD · $337.34 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
This strategy is NOT recommended for HD right now
Score 35/100. The technical signals do not support selling covered calls on HD at this time.
IV -100% vs avg — premiums below average, less income. ADX at 35 — strong trend, stock may run past strike. TTM Squeeze ON — breakout imminent, risky for capped strategies.
Check back when conditions improve, or consider a different strategy.
Quick Take
HD is trading at $337.34 with RSI at 47 (neutral territory). Options IV is at 0% — 100% below its 30-day average of 47%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
47
IV Today
0%
IV vs 30d Avg
-100%
MACD
bullish
ADX
35
MFI
50
The Setup
HD Covered Call
LONG STOCK
100 shares @ $337.34
SHORT CALL
$365 Jun '26 · $6.1/sh
Net Cost
$33,124
Max Profit
+$3,376
Break-even
$331.24
Projected P&L at Target
+$3,376
(10.2%)
P&L at Expiry
P&L Scenarios
What happens at different HD prices by expiry:
| HD Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $270 (-20%) | -$6,137 | -$6,137 | -$6,137 | -$6,137 |
| $287 (-15%) | -$4,450 | -$4,450 | -$4,450 | -$4,450 |
| $304 (-10%) | -$2,763 | -$2,763 | -$2,763 | -$2,763 |
| $320 (-5%) | -$1,077 | -$1,077 | -$1,077 | -$1,077 |
| $331 (-2%) | -$68 | -$65 | -$65 | -$65 |
| $337 (0%) ← now | +$597 | +$608 | +$610 | +$610 |
| $344 (+2%) | +$1,236 | +$1,269 | +$1,284 | +$1,285 |
| $354 (+5%) | +$2,074 | +$2,171 | +$2,260 | +$2,297 |
| $365 (+8%) ← target | +$2,682 | +$2,832 | +$3,010 | +$3,376 |
| $371 (+10%) | +$2,877 | +$3,026 | +$3,194 | +$3,376 |
| $388 (+15%) | +$3,060 | +$3,169 | +$3,272 | +$3,376 |
| $405 (+20%) | +$3,075 | +$3,174 | +$3,273 | +$3,376 |
Why This Strategy, Why Now
- RSI at 47
- IV -100% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 35 — strong trend, stock may run past strike
- TTM Squeeze ON — breakout imminent, risky for capped strategies
Key Risks
HD has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if HD approaches the strike before expiry.
ADX at 35 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.
TTM Squeeze is ON — a volatility breakout may be imminent. If the breakout is to the upside, your short call will be tested quickly.