Can Energy’s Strength Continue Into Year End? What the Charts Say About 3 Stocks.

SLB headquarters in Houston. (Mark Felix/Bloomberg)

Key Points

• Leadership in the energy sector has broadened meaningfully in recent weeks with driller stocks the standouts.
• International energy has also performed strongly, particularly in South America.
• SLB Ltd., APA Corp., and Valero Energy Corp. are highlighted as U.S. energy stocks with positive technical indicators and price targets.

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.

SLB trades at the upper end of a tight trading range and looks ready to advance.

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.

APA is showing a bullish inverse head and shoulders pattern.

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.

A strong run since April and break above cup with handle base bodes well for Valero Energy.

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.