Have you ever watched a stock you’ve been tracking quietly for months suddenly leap higher overnight, leaving you wondering if you missed the boat? That’s exactly what happened to a bunch of energy names this week, and honestly, it’s the kind of moment that gets any investor’s pulse racing.
Major geopolitical shifts don’t happen every day, but when they do, they can light a fire under entire sectors. This time, it’s energy, sparked by developments in Venezuela that could unlock massive oil reserves. Suddenly, sleepy stocks are wide awake, gapping higher and drawing fresh attention. But not all gaps are created equal, and picking the right ones matters more than just chasing the excitement.
Why Energy Stocks Are Suddenly in the Spotlight
In my experience following markets for years, there’s nothing quite like a catalyst that flips sentiment overnight. Energy has been the wallflower of the U.S. stock market for a while now – solid but overlooked, with momentum screens largely ignoring the sector. Then, out of nowhere, news hits about a potential regime change in Venezuela, home to the world’s largest proven oil reserves. We’re talking over 300 billion barrels. The possibilities for investment, infrastructure rebuild, and production ramp-up are enormous.
The reaction was immediate. Energy stocks that had been drifting opened sharply higher, creating those classic “air pockets” on the charts – gaps between the previous close and the new open. Some held firm and kept climbing. Others looked a bit shaky. The key, as always, is context: trend direction, volume, resistance levels, and whether the fundamentals back up the excitement.
Among the names catching attention, two stand out for their cleaner setups and stronger underlying stories. One is a refining powerhouse that’s been consistently delivering. The other is a diversified energy technology player with impressive margin growth. Let’s dig into why these two deserve a closer look.
Understanding Stock Gaps: More Art Than Science
Before jumping into specific stocks, it’s worth pausing on gaps themselves. I’ve seen investors treat every gap the same way – either jumping in blindly or avoiding them altogether. Neither approach works consistently.
A gap happens when new information hits and holders refuse to sell at previous prices while new buyers rush in. The result? Price skips a range entirely. But here’s the thing: no two gaps behave identically. One in a strong uptrend with heavy volume might signal the start of a major move. Another in a choppy stock after mixed news could fill quickly.
Questions I always ask:
- Is the overall trend supportive?
- Did volume explode on the gap day?
- Did price clear important resistance or just poke above it?
- How does the company’s fundamental story align with the catalyst?
In the current energy surge, some gaps look built to last, while others feel more speculative. That distinction is everything when deciding where to allocate capital.
Valero Energy: The Refining Leader That Keeps Delivering
If I had to pick one energy name that’s been a steady performer even before this week’s fireworks, it would be Valero. This company operates as one of the largest independent refiners in the U.S., turning crude oil into gasoline, diesel, and other products we use every day.
What impresses me most is how Valero has navigated a volatile environment. After a tough first quarter last year with a net loss, the company bounced back strongly. By the third quarter of 2025, revenues hit $32.2 billion, with net income returning to $1.1 billion. Refinery utilization reached an impressive 97%, setting records in key regions like the Gulf Coast.
Refining is ultimately a demand-driven business, and as long as people are driving and flying, gasoline demand tends to hold up better than crude prices might suggest. Valero benefits from that structural tailwind. Plus, its scale gives it advantages in sourcing crude and distributing products through retail and wholesale channels.
Strong gasoline demand and high utilization rates have been the backbone of consistent outperformance among major refiners.
From a technical perspective, Valero’s chart looks particularly clean right now. The stock gapped higher this week and has refused to give much back – a sign of real conviction. Recent support sits around $155–$160, a level that held firmly last fall. The rising 50-day moving average, currently near $172, offers another logical risk point for anyone looking to manage positions.
Perhaps the most interesting aspect is how Valero has been a standout among its peers for years. It’s not flashy, but it grinds higher when conditions are right. In a sector prone to booms and busts, that kind of reliability is rare.
Baker Hughes: Diversified Growth Beyond Traditional Oil
Baker Hughes brings a different flavor to the energy space. While many think of it as an oilfield services company, its reach extends much further – equipment and technology for oil and gas, LNG, power generation, and even emerging decarbonization projects.
The financial turnaround here has been remarkable. Adjusted EBITDA nearly doubled from $2.4 billion in 2020 to $4.6 billion in 2024, with margins expanding from 11.4% to 16.5%. By the third quarter of 2025, margins pushed even higher to 17.7% as revenues approached $28 billion. A record $32 billion backlog in its industrial and energy technology segment provides excellent visibility.
What sets Baker Hughes apart is diversification. Yes, it benefits from higher oil activity, but exposure to LNG, growing power demand from data centers, and industrial applications creates multiple growth drivers. In a world shifting toward cleaner energy, that balance feels increasingly valuable.
- Strong presence in liquefied natural gas projects
- Growing demand from AI-related power needs
- Capabilities in carbon capture and emissions reduction
- Software and digital solutions improving efficiency
On the chart, Baker Hughes gapped higher but hasn’t yet reclaimed its December peak near $50. That level feels like the line in the sand – a convincing break above on volume would signal real momentum. Until then, some consolidation or even a retest of the gap makes sense. Key support sits around $43, a level respected since last fall. Anything below that would raise caution flags.
I’ve found that stocks with solid fundamentals and multiple growth avenues often reward patience. Baker Hughes fits that profile nicely.
Why Chevron’s Story Feels More Complicated
For completeness, it’s worth touching on Chevron, widely seen as a potential direct beneficiary of Venezuelan developments. The company is the only major U.S. player still operating there under special licensing, and a more stable environment could open significant opportunities.
Add in the massive Hess acquisition completed last summer – a $53 billion deal bringing assets in Guyana, the Bakken, and elsewhere – and there’s plenty happening fundamentally. Yet the chart tells a messier story. Price action remains choppy, and the recent gap feels less convincing than others in the group.
Sometimes the stocks with the most obvious catalysts take longest to digest news. Chevron may need time for all the moving parts to align. For now, cleaner setups elsewhere draw my attention.
Broader Energy Sector Context for 2026
Zooming out, energy’s underperformance over the past year created a coiled spring of sorts. Low expectations often set the stage for positive surprises. Whether Venezuela’s situation evolves smoothly or hits roadblocks, underlying demand trends remain supportive.
Global oil consumption continues growing modestly. Refining margins benefit from complex facilities that few new plants can replicate. Services and technology providers gain from both traditional activity and energy transition investments. It’s not a pure boom like past cycles, but a more nuanced opportunity.
Investors should watch:
- Crude price stability versus geopolitical risks
- Refinery utilization and crack spreads
- LNG export growth and power demand
- Policy shifts affecting sanctions and investment
None of this is guaranteed, of course. Energy remains cyclical, and sentiment can swing quickly. But selective exposure to quality names with strong balance sheets and clear growth paths can make sense within a diversified portfolio.
Positioning for Potential Energy Moves
So how might an investor approach this? First, recognize that timing matters less than price and trend. Waiting for confirmation – such as Valero holding support or Baker Hughes clearing $50 – often beats trying to catch the exact bottom of a gap.
Second, size positions appropriately. Energy can move fast, both ways. Using defined risk levels (like those moving averages or prior support zones) helps manage downside.
Finally, keep perspective. One week’s excitement doesn’t redefine a sector. The best opportunities often come when fundamentals gradually improve while sentiment catches up.
Patience separates the best long-term investors from the crowd chasing every headline.
In the end, markets reward those who study price action alongside fundamentals. Right now, Valero and Baker Hughes offer compelling combinations of both. Whether you’re building a core holding or looking for tactical exposure, these two names merit serious consideration as we head deeper into 2026.
The energy trade isn’t over – it might just be getting started.
(Note: All investing involves risk. Past performance is no guarantee of future results. The views expressed here are personal opinions based on public information and technical analysis. Always conduct your own research or consult a financial advisor before making investment decisions.)
