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Plenty Of Hype In Ocugen Brings Opportunity

Mar. 02, 2021 1:55 PM ETOcugen, Inc. (OCGN)26 Comments
Individual Trader profile picture
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  • Shares have been rallying aggressively on Covaxin potential.
  • The market continues to price in an aggressive move in shares.
  • Instead of focusing solely on direction, our play would be to sell the elevated implied volatility on offer.
  • This brings an extra component to the set-up.
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If we look at a daily chart of Ocugen (NASDAQ:OCGN), we can see that shares broke out of consolidation last December on very strong volume. The consolidation zone lasted more than two years which is significant. The reason for the breakout was due to the announcement of a vaccine partnership with Bharat Biotech. The partnership revolved around Covaxin (Bharat's COVID-19 offering) and how it could be developed for the US market.

The gap on the chart below also is significant. When these gaps take place on strong volume after a prolonged period of time, it usually means a sustained move to the upside is in its initial innings. Furthermore, as we can see below, the gap has not been filled as of yet which is another bullish sign. Authentic breakaway gaps should always act as very strong support and with good reason.

The reason being is that if indeed a brand-new trend has begun in this stock, price has absolutely no business falling below the middle part of the gap. Although the announcement of a vaccine scientific advisory board definitely brought down the hype (along with some negative news concerning Bharat) in the aftermath of the Covaxin announcement, what was crucial was that price remained above support and that is what indeed has played itself out.

Then at the start of February, shares received another boost to the upside once more on strong volume. Shares rallied aggressively in February on the back of a multi-million capital raise. Obviously, the potential is huge in this space especially with multiple variants of the virus coming on the scene in recent weeks. It looks like vaccines are most certainly here to stay for the foreseeable future and Ocugen has gone into the business with a partner with a track-record in this area.



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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in OCGN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (26)

Ocugen COVID-19 Vaccine Co-Development Partner, Bharat Biotech Reports COVAXIN Was 78% Effective After Second Dose, Showed 100% Efficacy Against Severe COVID-19
Tumblebug profile picture
FYI - RE: Astrazeneca vaccine - "We now know significantly more about the association between the AstraZeneca vaccine and the rare but severe incidents with low platelet counts, blood clots and hemorrhages, than when Norway decided to pause use of the AstraZeneca-vaccine in March," says Geir Bukholm, Director of the Division of Infection Control and Environmental Health at the Norwegian Institute of Public Health.
"Based on this knowledge, we come with a recommendation to remove the AstraZeneca vaccine from the Coronavirus Immunisation Programme in Norway," says Bukholm.
Calculations have been performed based on Norwegian data where the risk of dying from COVID-19 disease among the different age groups is compared with the risk of dying from the severe, but rare, condition with severe blood clots observed after AstraZeneca vaccination.

"Since there are few people who die from COVID-19 in Norway, the risk of dying after vaccination with the AstraZeneca vaccine would be higher than the risk of dying from the disease, particularly for younger people," says Bukholm.
Beanaar profile picture
I'm glad I got in at $1.22... sort of wish I hadn't cashed out at $18 but I believe there is real potential for it to be $20+, and not for reasons relating to Covaxin. The eye therapeutics and granted orphan status in Europe is reason enough for me.
@Beanaar How many years ago did you buy? The stock hasn't been that low since they announced the covid deal. Before Dec 22 it was never that high as far back as I looked.
Beanaar profile picture
@dellis915 I got it about a week before Christmas
HyperbolicSTONK profile picture
I think it's a great option for a swing. Long term? Two many covid plays for it to get enough interest. Just my gut.
Individual Trader profile picture
Everything going for Ocugen at present - vaccine - shows 81% efficacy
They only make money if it’s approved in the US. We already have enough doses of other more effective vaccines to get everyone vaccinated. It wont be approved here. What is the point of buying this?
Individual Trader profile picture

Why do you believe it will not get approved?
@Individual Trader I think they will get approval for a phase 3 study. I have no idea how they populate that study, particularly with three (most likely five) vaccines readily available for free in that time frame. It will be particularly difficult to find vulnerable populations that volunteer for a study (50% chance of placebo to boot) rather than take an already available vaccine.

Best case they complete the study in five to six months. Will the US still be in "emergency use" approvals at that time? Will they grant a sixth EUA vaccine post pandemic? If not, a much more rigorous study over time which includes long term data will be required. In that case FDA approval could be 2-3 years out. Worst case maybe, but certainly logical.
@Stevej2344 We do need a safe Vax for children and pregnant women. Covaxin can potentially offer this. Additionally, due to Covaxin spiking many proteins because it attacks the whole virus, it can continue to fight even future mutant variants
Whats the opposite of hype? Thats what OCGN has been bombarded with.
Individual Trader profile picture

What is your expectation here? Is the hype justified ?
" it is much easier to play defence in low-priced stocks because there is only so far a stock can fall. " I believe no stock could fall more than 100%. So, shouldnt be from that standpoint irrelevant what is price per share ? (easier portfolio diversification due to lower option contract value is another thing).
Individual Trader profile picture

Yes very true. But with low priced optiobale stocks, you dont have to ut up as uch capital and rolls are temporary as you are cloer to zero than a high priced underlying
I was lucky and bought at $2 and sold at $12. Other than their work on eye diseases, there's really no reason for this stock to rally (unless of course, the Reddit army takes over).
The track record for OCGN has been miserable. An investment of $10,000 at IPO would be worth about $168.00 now, and would include a 60 to 1 reverse split.

With it's 49 employees, no manufacturing, no marketing, no customer base, no FDA approvals, no revenue or earnings, and no experience with vaccines one has to wonder why Bharat selected this company as their US partner. OCGN is already attempting to tap equity markets for emergency funding.

I can't help but wonder if the plan never really was to sell Covaxin in the US, but rather, to make a quick $1.5 billion from equity markets by hyping a penny stock. I'll be interested to see when forms are filed with the SEC if Bharat got an equity stake in OCGN as part of the agreement.

Others may wish to speculate. But I'm staying far away from this one.
AgNO3 profile picture
02 Mar. 2021
check Ocugen twitter handle for DD.
sittingbear profile picture
Still want to be involved but just buy and sell.. I bought because of three new board members recently.
sittingbear profile picture
I bought 150 shares, it went up, I sold. Kept 50. Now they are raising money. Stock down a buck. I sold.. simple
Individual Trader profile picture

Any long term prediction here?
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