The pandemic. It’s caused a great deal more pain than good. But when it comes to today’s Ocugen (NASDAQ:OCGN), the future of OCGN stock appears more promising than ever.
Let’s look at what’s happening off and on the price chart of OCGN, then offer a risk-adjusted determination aligned with those findings.
Business pivots during the Covid-19 outbreak have been commonplace. Famously, auto giants General Motors (NYSE:GM) and Ford (NYSE:F) were tapped by the U.S. government to make ventilators. But those companies were far from alone. The help came in all sorts of important and diverse ways to be sure.
Readers may also recall 3M (NYSE:MMM) was called upon to increase production of its N95 respirator masks for frontline workers. But the commitment to make a difference during the pandemic’s darkest hours didn’t stop there by any means.
Privately held spirits giant Bacardi made hand sanitizer available. Bank of America (NYSE:BAC) lent a hand to accommodate financially strapped customers. Apple (NASDAQ:AAPL) sourced and procured 20 million masks. Beyond Meat (NASDAQ:BYND) donated its plant-based food to hospitals and food banks. Amazon’s (NASDAQ:AMZN) Audible subsidiary offered a collection of educational streaming content for children for free.
The list of companies doing their part this past year goes on and on. But while much of those efforts have come and gone, importantly, one company whose pivot may just be getting started is biotech OCGN.
OCGN Stock Rides Vaccine Headlines
In the United States we’re collectively aware and grateful for the achievements from Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA) and Johnson & Johnson (NYSE:JNJ). The trio’s Covid-19 vaccines have quickly allowed more than 200 million Americans to be at least halfway to full immunization. But there’s still work to be done. And maybe more so given vaccine hesitancy following J&J’s recent halt tied to blood clots and two new cases now under investigation.
To say the least, in regard to this particular response to Covid, three is obviously not a crowd. In fact, it’s fair to say a more crowded field would be welcome news. But that’s even more apparent globally where the pandemic continues to rage out of control. The worst of that situation is in India. The world’s second most populous country has seen five straight days of record-breaking infections this week. But help may be on the way. Enter OCGN stock.
OCGN, a once-financially strapped nano-cap with ambitions to cure blindness is, and against the odds, on its way to pivoting into a household name of importance. A seeming longshot when the outfit partnered with India-based Bharat Biotech to distribute, pending approval, its Covid-19 Covaxin vaccine in the U.S., Ocugen appears to be ever closer to that achievement.
Covaxin has emergency usage authorization in India, where Bharat recently announced very promising interim results from a Phase 3 study. The findings included 100% efficacy against severe Covid-19 disease. And here in the U.S., Ocugen is ready to launch a two-dose vaccine later this quarter with 100 million doses available upon clearance from the Food & Drug Administration (FDA).
OCGN Stock Weekly Price Chart
Source: Charts by TradingView
These days OCGN stock is a name that deserves to be taken more seriously than it was just a couple months ago. Technically, what may have looked like a flash-in-the-pan situation with no real chances for a second act recovery has turned into a much more formidable corrective base.
This past week’s huge rally on the back of Covaxin Phase 3 news had the impact of reversing OCGN stock out of a deep testing pattern. Importantly, the price action also propelled shares into the right side of an emerging base. The initial reaction found resistance at Ocugen’s 62% retracement level tied to its February high, but that’s not necessarily a knock against shares. The stock did go up a stunning 162% before finding resistance.
As it stands, shares have retreated into a challenge of matching 38% Fibonacci supports tied to the overall base depth, as well as this past week’s low-to-high cycle. With stochastics bullishly aligned and on the cusp of moving out of oversold territory, buying OCGN’s pullback in anticipation of an emerging uptrend and even a base breakout looks interesting. But I would refrain from simply buying OCGN stock. It is after all, still an untested small-cap biotech.
To make OCGN’s bullish promise look even better I’d go with a collar strategy. With this stock-based spread investors maintain an ironclad defense if shares falter technically, while participating if things go smoothly.
Reviewing the options market and FDA news expected in the next month or two, the July $10/$20 collar combination is a favored strategy to navigate Ocugen with greater authority and maybe the start of something unusually great in your portfolio.
On the date of publication, Chris Tyler holds, directly or indirectly, Beyond Meat (BYND) and its derivatives, but no other securities mentioned in this article.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.