Is Ocugen Headed for a Breakdown? – July 28, 2021

Ocugen Inc. (OCGN) is a clinical-stage biopharmaceutical company. It is focused on discovering, developing and commercializing a pipeline of innovative therapies that address rare and underserved eye diseases.

The company has in-licensed Covaxin, a whole-virion vaccine for Covid-19 that may have advantages over current vaccines in use today, but the earliest it will be approved is in the second quarter of 2023.

OCGN has a very high current ratio of 12.0 and a debt-to-equity ratio of 0.1. The company has had negative recent earnings and estimates for more negative earnings until 2022.

Based on its price-to-book ratio of 29.4, the stock looks overvalued compared to the industry average. The stock’s performance has been very volatile this year as shown in the chart below.

Take a look at the 1-year chart of OCGN below with added notations:

After surging in a big way back in February, OCGN has repeatedly bounced on top of a key level of support at $6 (green). The stock appears to be falling back down to that support again, and another rally could start from there.

However, a break of $6 could mean much lower prices for the stock.  Therefore, a trader could enter a short trade under $6 if the stock were to break below that support level.

Author: Christian Tharp, CMT