By Doug Busch

The rotation into defensive areas of the market is hardly a new development. Indeed this move has been a consistent force in recent weeks, with healthcare and energy ranking as the top performing sectors in the S&P 500 over the last one-week, one-month, and three-month periods.

Within energy, leadership has broadened meaningfully. The VanEck Oil Services ETF is up 21% over the past three months, with drillers the standouts. Halliburton and TechnipFMC are the best performers here, up 30% and 25%, respectively. Exploration stocks have also done well, with the SPDR S&P Oil & Gas Exploration and Production ETF up 8% over the same stretch. Even coal has roared back, with Peabody Energy and Warrior Met Coal gaining 31% and 64%, respectively.

International energy has been equally impressive, particularly in South America. Ecopetrol, Colombia's state-run oil producer, is riding a five-week winning streak and last week decisively cleared the key round-number level of $10. YPF in Argentina broke above a weekly double-bottom pivot at $37.77 in a 10-month base. Brazilian electricity producer Centrais Eletricas Brasileiras is up more than 100% in 2026 and offers a near-6% dividend yield.

What makes this sector-wide strength even more notable is that it has occurred despite a sagging crude price: a dynamic that, to me, is highly telling. With momentum firmly at its back, let's examine three U.S. stocks that stand out in the current environment.

SLB Ltd., the oil-equipment company that at 20% is the largest-weighted holding in the VanEck Oil Services ETF, has had a challenging 2025, down about 4% through the end of last week. It does however offer a solid 3.1% dividend yield. Since carving out lows in early April, the stock has been moving sideways in a tight $31 -- $38 range, forming a bullish ascending triangle. In late October, SLB pushed above both its 200-day simple moving average and its 21-day exponential moving average. The 200-day crossed above the 21-day can late last week in a bullish golden cross.

Last week the stock also logged its first five-week winning streak since the eight-week run between February and April 2024. Given the improving technical backdrop, I believe an entry here makes sense, with a reasonable target near $45 in the first quarter of 2026. The bullish thesis remains intact as long as SLB holds above $35.

SLB traded around $36.50 Monday.

APA Corp., an exploration company, is up 7% year to date, handily outperforming the 1% gain in the SPDR S&P Oil & Gas Exploration & Production ETF. It offers a dividend yield north of 4% and trades just 4% below its recent 52-week high, an improvement on the 11% pullback for the sector ETF from its annual high. The stock just delivered its third consecutive positive earnings reaction, surging more than 9% on Nov. 6.

APA has also shown notable consistency, declining in back-to-back weeks only twice in the last seven months. On the daily chart, shares are hovering around a double-bottom pivot at $24.85. The weekly chart presents an even stronger picture, with a bullish inverse head-and-shoulders pattern taking shape. A decisive push above $25 should target a move toward $36 by March. The setup remains constructive as long as the stock holds above $23.

APA Corp traded around $24.50 Monday.

Valero Energy Corp, a major oil and gas refiner, is enjoying a strong 48% year-to-date return and offers a 2.5% dividend yield. Shares sit just 1% below their latest 52-week high and are now testing the round $180 level for the third time since April 2024. As the old technical adage reminds us, "there is no such thing as a triple top." Round-number theory also came into play earlier this year when the stock bounced firmly off the $100 level to record a bullish piercing-line candle on April 7. Since that inflection point, Valero has gained more than 80%.

On Nov. 10, the stock broke above a cup-with-handle pivot at $176.32, and the depth of that pattern successfully retested the prior cup-base breakout above $155.22 from Sept. 3. Given the powerful momentum and constructive technicals, I believe one can enter here with a target toward $210 by early 2026. The bullish case remains intact above $170.

Valero Energy traded around $182 Monday.

Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

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November 17, 2025 11:16 ET (16:16 GMT)

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