Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<div><ul><li>The liquid renewable fuels sector has entered 2H26 in the strongest position it has occupied in years. </li><li>Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance sheets are healthier, and carbon credit revenue is maturing into a durable earnings stream that stands apart from physical fuel.</li><li>In this report, we walk through the five most resounding themes from companies’ interim results and recent WTR events, illustrated with company-level evidence and near-term catalysts with our thoughts on what we’re watching in the coming weeks for investors to follow.</li></ul></div>

The liquid renewable fuels sector has entered 2H26 in the strongest position it has occupied in years. Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance sheets are healthier, and carbon credit revenue is maturing into a durable earnings stream that stands apart from physical fuel.In this report, we walk through the five most resounding themes from companies’ interim results and recent WTR events, illustrated with company-level evidence and near-term catalysts with our thoughts on what we’re watching in the coming weeks for investors to follow.

WTR Circular Carbon Focus Report : Five Key Themes Driving Liquid Renewable Fuels

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

Rex American Resources / Equity Bottom-Up

<ul>
  <li>REX is a highly efficient ethanol producer with a strong operational track record, evidenced by its high resilience and growth scores and nineteen consecutive profitable quarters.</li>
  <li>The company is making significant strategic investments in carbon capture and sequestration (CCS) and ethanol capacity expansion, positioning it to capitalize on substantial federal tax credits (45Q and 45Z) and the growing demand for low-carbon fuels.</li>
  <li>Despite strong profitability, the company faces risks inherent to the ethanol industry, including volatility in commodity prices, dependence on government regulatory support (like the Renewable Fuel Standard), and the long-term threat of electric vehicle adoption.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  REX is a highly efficient ethanol producer with a strong operational track record, evidenced by its high resilience and growth scores and nineteen consecutive profitable quarters.
  The company is making significant strategic investments in carbon capture and sequestration (CCS) and ethanol capacity expansion, positioning it to capitalize on substantial federal tax credits (45Q and 45Z) and the growing demand for low-carbon fuels.
  Despite strong profitability, the company faces risks inherent to the ethanol industry, including volatility in commodity prices, dependence on government regulatory support (like the Renewable Fuel Standard), and the long-term threat of electric vehicle adoption.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Rex American Resources (REX US) - Apr 2026

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We remain bullish (as of our 4/21/26 Compass) on the S&amp;P 500 (SPX), Nasdaq 100 (QQQ), and Russell 2000 (IWM).</li>
<li>With that said, we have expressed our concern over the past two weeks in our reports, particularly as it relates to a prolonged consolidation for QQQ/Technology (XLK).</li>
<li>We continue to believe a consolidation/continuation of the short-term downtrends is likely through mid-to-late-August amid ongoing choppy price action for semiconductors (SOXX), memory (DRAM), and optical equipment/photonics (EUV) names.</li>
</ul>


We remain bullish (as of our 4/21/26 Compass) on the S&amp;P 500 (SPX), Nasdaq 100 (QQQ), and Russell 2000 (IWM).
With that said, we have expressed our concern over the past two weeks in our reports, particularly as it relates to a prolonged consolidation for QQQ/Technology (XLK).
We continue to believe a consolidation/continuation of the short-term downtrends is likely through mid-to-late-August amid ongoing choppy price action for semiconductors (SOXX), memory (DRAM), and optical equipment/photonics (EUV) names.


Upgrading Communications (XLC) To Market Weight; A.I. Names to Remain Under Pressure?

<ul>
<li>We are officially downgrading our outlook to bearish with the S&amp;P 500 (SPX) violating major support at 6480-6520, NQ violating 24,000, and Russell 2000 (IWM) breaking below crucial $245 support.</li>
<li>This comes after downgrading our outlook to neutral in our 3/3/26 Compass.</li>
<li>We view this latest rally as a selling opportunity at resistance at 6480-6520 and the 200-day MA</li>
</ul>


We are officially downgrading our outlook to bearish with the S&amp;P 500 (SPX) violating major support at 6480-6520, NQ violating 24,000, and Russell 2000 (IWM) breaking below crucial $245 support.
This comes after downgrading our outlook to neutral in our 3/3/26 Compass.
We view this latest rally as a selling opportunity at resistance at 6480-6520 and the 200-day MA


Downgrading Outlook to Bearish; Stay Defensive; $SPX Rally a Selling Opportunity?

<ul>
<li>Our outlook as of our (3/3/26 Compass) remains near-term neutral on the S&amp;P 500 (SPX), after being bullish for all but one week since 4/22/25 (we went neutral 11/19/25-11/25/25).</li>
<li>The local low from 3/9/26 still holds, but we are increasingly concerned about potential support violations.</li>
<li>Crucial supports (and downside triggers) are $245 on the Russell 2000(IWM), the 200-day MA (currently 6613) and 6480-6520 on SPX, and 6-month support at 24,000 on Nasdaq 100 futures (NQ)</li>
</ul>


Our outlook as of our (3/3/26 Compass) remains near-term neutral on the S&amp;P 500 (SPX), after being bullish for all but one week since 4/22/25 (we went neutral 11/19/25-11/25/25).
The local low from 3/9/26 still holds, but we are increasingly concerned about potential support violations.
Crucial supports (and downside triggers) are $245 on the Russell 2000(IWM), the 200-day MA (currently 6613) and 6480-6520 on SPX, and 6-month support at 24,000 on Nasdaq 100 futures (NQ)


At a Crossroads; Downgrading Transportation; Significant Downside Air Pocket Risk

United States

REX American Resources Corporation is invested in ethanol production entities. The Company produces ethanol, and dried and modified distillers grains, as well as leases real estate properties.

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Rex American Resources (REX US)

WTR Circular Carbon Focus Report : Five Key Themes Driving Liquid Renewable Fuels

Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance...

Water Tower Research

Primer: Rex American Resources (REX US) - Apr 2026

REX is a highly efficient ethanol producer with a strong operational track record, evidenced by its high resilience and growth scores and...

αSK Primers

Upgrading Communications (XLC) To Market Weight; A.I. Names to Remain Under Pressure?

Upgrading Communications (XLC) to Market Weight; A.I. Names to Remain Under Pressure (SOXX, DRAM, CHAT, EUV) likely through mid-to-late-August amid...

Vermilion Research

Downgrading Outlook to Bearish; Stay Defensive; $SPX Rally a Selling Opportunity?

Downgrading Outlook to Bearish; Stay Defensive; Latest $SPX Rally Likely to Roll Over Here at 6480-6520 or 200-day MA resistance

Vermilion Research

At a Crossroads; Downgrading Transportation; Significant Downside Air Pocket Risk

Significant Downside Air Pocket Risk; Downgrading Transportation $IYT $XTN to Market Weight; Crucial supports/downside triggers: $245 on $IWM, the...

Vermilion Research

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