OCGN Stock News: Ocugen is a highly volatile play on a covid vaccine, key levels to watch

• Ocugen shares are highly volatile and retail follows closely.
• OCGN shares have spiked on the back of covid vaccine news
• OCGN wants to bring a covid vaccine to the US market.

Ocugen is a medical company that was focused on eye diseases but quickly changed focus once the pandemic hit. Ocugen now has one of its strongest business opportunities in the development of a covid-19 vaccine. OCGN has partnered with India's Bharat Biotech to bring its COVAXIN COVID-19 vaccine to the US market.

OCGN stock price

Ocugen shares have been highly volatile the past number of months. Operating in the biotech medical sector can be volatile anyway due to regulatory and trial data, but Ocugen has seen increased volatility as a result of its pivot toward covid vaccine development.

OCGN shares traded around $0.30 in December but spiked to nearly $20 by February. The catalyst was OCGN partnering with Bharat Biotech. Bharat is an Indian vaccine company that is working on bringing its COVAXIN COVID-19 vaccine to market. Ocugen will look after bringing COVAXIN to the US market, including regulatory approval and distribution.

On February 8, OCGN shares spiked on the news of a share placing. Normally, share placings are done at a discount to the market, but this was done at a premium. Retail traders jumped on the news and sent OCGN shares soaring.

Since then, it has largely moved sideways to lower as OCGN filled the gap caused by the initial spike and broke several key support levels along the way. 

OCGN jumped again on April 22 as positive trial data for the COVAXIN drug was released to the market. OCGN shares failed to take out previous highs set back in February but did still manage to register an impressive 42% gain. Further spikes were seen on May 3 as Ocugen announced that COVAXIN proves effective against the main variants of the covid virus. 

Ocugen is to release results for the first quarter 2021 on Friday, May 7. Earnings per share are expected to be $0.50. 

OCGN technical levels

The failure to break new highs recently is in itself a bearish argument. Investors and traders now have more information following trial results and positive results in relation to COVAXIN's effectiveness against covid variants. With this new information, the risk profile of the investment has actually lowered since the highs seen on February 8. Remember, the move on February 8 was sparked by Ocugen announcing a premium share placing. At this time not enough was known about the trial results of COVAXIN or its viability against covid and covid variants. Now that they have that information or more information at least, the risk of success or failure of COVAXIN has tilted more toward success, but OCGN shares have not recaptured old highs. This tells us that the earlier move in February was too much pure speculation and froth or we are missing something.

For now, OCGN remains in bullish formation with a series of higher lows and sits comfortably above the main moving averages. Support is key at $11.70 and then $9.87. These levels are the 9 and 21-day moving averages respectively. A break below $9.87 would then see OCGN look to reestablish itself in the consolidation area below $7.

Resistance is from the February high of $18.77. Results will be important but more important will be news around the commercial and regulatory viability of COVAXIN.

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