In 2021, biopharmaceutical company Ocugen (NASDAQ:OCGN) has been a paradise for well-timed, short-term traders. On the other hand, long-term OCGN stock investors have been through a virtual roller-coaster ride.
As we’ll see, the stock has well-defined support and resistance levels. Swing traders could potentially profit (no guarantees, of course) from a simple rinse-and-repeat strategy.
At the same time, stay-the-course investors will want to keep up with Ocugen’s progress in advancing its Covid-19 vaccine candidate, known as Covaxin.
There’s a lot to unpack here. So, let’s start off with an analysis of the wild pops and drops in OCGN stock, and the levels that you’ll want to watch out for.
A Closer Look at OCGN Stock
No fewer than three times, the Ocugen share price spiked to $15 before declining sharply.
This happened in February, May and November. Clearly, the market is trying to tell us something here.
Specifically, the sellers are prepared to step in at the $15 level. Therefore, it’s not a bad idea to start taking profits whenever OCGN stock gets there.
What about a buy price, then? No problem – there’s an established support level, as well.
Since April at least, $6 has been like a floor for OCGN stock. By this, I mean that the buyers have typically stepped in when the share price fell to that level.
Don’t misunderstand – the stock is capable of declining below $6. Still, regardless of one’s time frame, it’s possible to start a position at that price point with some confidence.
Interestingly, OCGN stock just recently popped to $15 and then slid back to $10.
That’s not an ideal buy price, so you might choose to set a limit order or write a put option in order to purchase Ocugen shares at a more favorable price point.
Partner’s Victory Is Also Ocugen’s Victory
Just to recap, Ocugen is co-developing Covaxin with India-based Bharat Biotech, and is advancing the drug in the U.S. and Canadian markets.
To be honest, though, Bharat’s been doing the legwork when it comes to actually testing Covaxin for safety and efficacy in treating/preventing Covid-19.
Is that really a problem for Ocugen, though? After all, it still means that Bharat’s victories are Ocugen’s victories, too.
Hence, any Covaxin approval granted to Bharat is also Ocugen’s approval. That’s my story, and I’m sticking to it.
In any case, it’s a win-win as the World Health Organization (WHO) just granted Emergency Use Listing status for Covaxin.
All of the stakeholders should celebrate this development, as Covaxin has reportedly demonstrated 77.8% effectiveness against symptomatic Covid-19, as well as 65.2% protection against the new delta variant.
Not only that, but India’s drug regulator has granted Covaxin a shelf-life extension of up to 12 months from the date of manufacture.
Why the Stock Fell (Maybe)
That’s a whole lot of good news, wouldn’t you agree?
Yet, as described earlier, OCGN stock tanked from $15 to $10. This certainly might seem irrational.
It’s been suggested that the share-price decline was merely an instance of investors “selling the news.”
The idea is that traders may have already run up the stock price in anticipation of the WHO approval, and then taken profits afterwards.
It’s as valid an explanation as any. So, I’ll just go with it.
Regardless of the reason for the sell-off, it’s really just an opportunity to start a long-term position in OCGN stock.
Alternatively, you can wait for a lower price if the stock continues to fall. If that’s your strategy, then keep your eye on that $6 level.
The share-price rebound might happen fairly soon, actually.
In a fresh report, Ocugen revealed that it has applied to the U.S. Food and Drug Administration (FDA) for an Emergency Use Authorization (EUA) for Covaxin, for children aged two through 18.
Could this be the catalyst for a well-deserved run-up in OCGN stock? Alas, only time will tell.
The Bottom Line
Sometimes, a sell-the-news event can provide investors with a chance to load up on a high-conviction stock.
Ocugen and partner Bharat Biotech are making strides in advancing Covaxin.
Yet, the market doesn’t seem to want to push OCGN stock higher and keep it there.
That’s not necessarily a bad thing if you’re a nimble trader with a rinse-and-repeat strategy.
And if you’re in it for the long haul, watch for more positive developments as Bharat and Ocugen work diligently to provide their Covid-19 vaccine in multiple world regions.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.