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Is Ocugen Headed for a Breakdown?

A support level has formed in the chart of Ocugen Inc. (OCGN). OCGN has repeatedly bounced on top of that key level. If the stock falls through this s...

This story originally appeared on StockNews

A support level has formed in the chart of Ocugen Inc. (OCGN). OCGN has repeatedly bounced on top of that key level. If the stock falls through this support, a breakdown could occur. Read more to learn how to take advantage of this trading opportunity. - StockNews

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:

Chart of OCGN provided by TradingView

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.

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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.

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OCGN shares rose $0.02 (+0.29%) in premarket trading Wednesday. Year-to-date, OCGN has gained 279.78%, versus a 18.37% rise in the benchmark S&P 500 index during the same period.

About the Author: Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.


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