After months of sideways price action, Covid-19 vaccine play Ocugen (NASDAQ:OCGN) stock is zooming higher once.

The big development is a likely Emergency Use Listing (EUL) from the World Health Organization (WHO) for Covaxin.

Developed in India by Bharat Biotech, Ocugen holds the U.S. and Canadian rights to market this vaccine.

An EUL certainly changes the game for this candidate, but it’s debatable whether WHO EUL status changes the game specifically for Ocugen.

Nevertheless, that hasn’t stopped traders from sending this former penny stock back to double-digit prices.

So, with the crowd misreading the situation, should you join the short-side, and fade the hype? Not so fast.

It may seem like it still stands to see a big drop in price, but between squeeze risk, and the emergence of a non-Covaxin catalyst, going against the grain may also be a risky move.

OCGN Stock and Its Recent Rally

Headlines about Covaxin’s high chances of getting an EUL from the WHO has helped to renew bullishness for Ocugen shares.

Yet this development has little direct positive impact on the company. First, because this clinical-stage biotech company has no economic exposure to Covaxin sales outside of the U.S. and Canada.

Second, it’s still waiting on approval from health authorities in the markets that it does have exposure. Stateside, the company threw in the towel with getting Emergency Use Authorization (EUA) from the Food and Drug Administration (FDA).

To sell into the American market, it needs full approval. The problem? Getting it is at least a year away.

By then, there may be little demand for another vaccine. Especially as President Biden’s employer-based vaccine mandate will likely result in a big jump in vaccination levels within the next few months.

This calls into question the prospects of Ocugen being able to sell the 100 million doses of Covaxin it has set out to create. Once, of course, it gets the go-ahead to roll it out.

Yes, some may say it still has EUA potential in Canada, but with 76% of its population already receiving at least one dose of the other vaccines, don’t expect an EUA in Canada to produce the results needed to sustain the valuation of OCGN stock.

Having said all this, I will admit that taking a short position in it isn’t a surefire path to trading profits.

Why Fading the Crowd Could Backfire

Based on the facts, Ocugen seems like a clear-cut “fade the crowd” situation.

Scores of short-sellers have come to this conclusion. That’s why around 27.4% of its outstanding float has been sold short. However, there are two reasons why it may not be so worthwhile to short it.

First, it’s hard to tell when traders will realize they’re misreading the situation. Given how much it’s moved up on the prospects of getting an EUL from WHO, it could see another epic spike when it actually gets this designation.

Yes, “buy the rumor, sell the news” may mean those snapping up shares today quickly cash out in the coming days or weeks.

Even so, between now and when it officially gets an EUL, OCGN stock could make its way from $10 to $15, or possibly $20 per share. Those shorting it today will need to be able to withstand a possible near-term squeeze.

Second, the potential returns from going short may be limited as well. Sure, I’ve argued before that, once the Covaxin catalyst fizzles out, shares are fast headed back to below $1 per share.

However, progress it’s making with a non-Covid candidate in its pipeline may limit downside risk. As my InvestorPlace colleague Will Ashworth wrote recently, the company announced that China-based CanSino Biologics (OTCMKTS:CASBF) will collaborate with it on the development of OCU410, a gene therapy treatment for age-related macular degeneration. The prospects of OCU410 are nowhere near enough to keep Ocugen at today’s prices. But it may mean my past concerns about it being at risk of tanking by 80%-90% may have been overblown.

It’s Best Not to Take a Position in Ocugen

Putting it simply, it doesn’t make much sense to buy Ocugen, on the belief it stands to profit big from Covaxin. That said, going short may not be a “can’t miss” opportunity either.

You may get squeezed before hype fades for the stock. Or, your profit potential from going short may not be as massive as it seemed just a few weeks back.

Highly volatile, with a tendency to make unwarranted moves higher, it’s best to not go long (or short) OCGN stock.

On the date of publication, Thomas Niel 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.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.