HCW Biologics Inc. (NASDAQ:HCWB) stock traded lower on Tuesday. Investors are locking in profits following a massive 262% surge in the stock price during the previous week.



Despite the recent pullback, the biotechnology stock remains higher overall.



<h2>Retail Investors Take Profits</h2>



The primary driver behind Tuesday's decline is profit-taking. Traders are capitalizing on recent exponential gains.



HCW Biologics shares previously fell in Monday's session. This downward pressure continued into Tuesday.



Broader market sentiment also weighed on equities, as Nasdaq futures are down 0.75% while S&amp;P 500 futures have shed 0.41%.



<h2>Strong Q1 Financial Results</h2>



The initial rally started after strong first-quarter financial results.



For the first quarter, HCW Biologics reported earnings per share of 37 cents. Quarterly sales reached $6.54 million, an increase from the $5,06 millions a year ago.



<h2>Pipeline Progress And Milestones</h2>



Investors recently cheered advancements in the company's autoimmune pipeline. The company secured an exclusive worldwide licensing agreement with Trimmune, and the deal covers the in vivo rights for HCW11-006.



Additionally, preliminary clinical data readouts for HCW9302 in alopecia areata are expected in the first half of 2026.



CEO Hing Wong stated, &#34;HCW9302 was selected as the lead product candidate for the company's autoimmune program because it has demonstrated relatively high IL-2Rα affinity and sustains serum exposure, which implies it has a strong profile for the treatment of autoimmune disorders.&#34;



HCW Biologics reported cash and equivalents of $1.23 million, down from $1.95 million a year ago.



<h2>HCWB Stock: Key Technical Levels To Watch</h2>



The stock is trading 171% above its 20-day SMA (47 cents) and 169.1% above its 50-day SMA (48 cents).



At the same time, it remains 40.7% below its 200-day SMA at $2.16, which keeps the longer-term trend picture cautious despite the recent bounce.



Momentum is the key near-term risk: RSI is at 84.20, which signals the move is overbought and more vulnerable to pullbacks or choppy consolidation.



The moving-average structure is still mixed-to-bearish longer term, with the 20-day SMA below the 50-day SMA and the 50-day SMA below the 200-day SMA.



<ul>
<li>Key Resistance: $2.16</li>



<li>Key Support: $1.01</li>
</ul>



HCWB Price Action: HCW Biologics shares were down 17.16% at $1.12 at the time of publication on Tuesday, according to Benzinga Pro data.



Photo: Alopecia-Photo via Shutterstock

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HCW Biologics Inc. (NASDAQ: HCWB) stock fell 17.16% to $1.12 on Tuesday as investors locked in profits after a 262% surge following strong Q1 earnings. The company reported earnings per share of 37 cents and quarterly sales of $6.54 million. Despite the decline, the stock remains significantly higher overall, driven by advancements in its autoimmune pipeline. Broader market sentiment also contributed to the decline, with Nasdaq futures down 0.75%. Key resistance is at $2.16, while support is at $1.01.

Why HCW Biologics Stock Is Falling On Tuesday?