(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Let’s talk about when good things happen to sleepy stocks. Typically, you’re getting a gap higher. This is because the holders have seen the news and decided they have no interest in selling, while a sudden potential change of fortune for a company is all of a sudden surfacing brand new buyers. This forms an air pocket between the prior day’s close and today’s open — we call these air pockets “gaps” and gaps are very tricky. The important thing I want you to know about gaps is that they’re like snowflakes. No two gaps are perfectly identical. You must take into account the context in which gaps appear – did they occur in an uptrend or a downtrend? Is the stock prone to gaps because of the regular impact of a lot of news flow from overseas? How meaningful is the size of the gap? Did the stock gap up above prior resistance or below prior support? What sort of volume accompanied it? Thinking through the sheer number of variables listed above (and all the variables I didn’t get to), you can imagine all the possible meanings of a stock gapping open. Your takeaway should be that there are no simple, hard and fast rules about gaps. On the Best Stocks in the Market list right now, we have a slew of energy names that gapped higher on Monday in the wake of our military operation to remove Venezuela’s corrupt dictator. People are excited about the possibility of U.S. energy companies putting in investments and infrastructure to help bring proven oil reserves of over 300 billion (!) barrels – the largest stockpile on planet earth. Sean and I are going to look at Chevron (CVX) , Baker Hughes (BKR) and Valero (VLO) — three gappy oil stocks on our radar. Best stock spotlight: Energy Sean — We’re not geopolitical experts, but we are students of price, and there has been an obvious catalyst in that sector affecting the price of energy stocks. Before the Venezuela headlines, we already had four energy names on the list: Baker Hughes (BKR), Phillips 66 (PSX) , Valero (VLO) and Exxon Mobil (XOM) . Following the energy-sector bounce tied to those developments, three additional names were added: Halliburton (HAL) , SLB Ltd. (SLB) and Chevron (CVX), the latter of which many view as the consensus beneficiary to the situation down south. For the past year, energy has been an unloved corner of the market according to our momentum screens. We don’t want to jump at the first catalyst that comes to us, and some charts look better than others, so we’ll go through the best ones to focus on from the list. Fundamentally, CVX has a number of things going on right now that the price is chewing through. First of all, Chevron bought Hess in July. The acquisition was worth $53 billion, making it one of the 10 largest energy deals in history. This gave the company access to upstream operations in the United States, Guyana and Malaysia, and operations in the Bakken shale of North Dakota. In terms of the Venezuela news, CVX is the only major U.S. oil company still operating in Venezuela under a specific U.S. sanctions license. However, Venezuela’s oil infrastructure is dilapidated and production capacity is far below historic levels, so there’s a lot of moving pieces right now. Chevron was added to the list post regime-change, but it is not one we want to focus on today. The price action looks messy, and it’ll take some time for things to play out. As Josh noted, gaps can be tricky and this is a tough one: Now onto the two best of the group… Valero Energy Corp. (VLO): Sean — Valero Energy is an oil and gas refining company. VLO is one of the largest independent petroleum refiners and operates a network of retail and wholesale oil distributors. Valero’s fundamentals have shown some volatility, but with recent improvement. After posting a net loss in Q1 FY25, the company returned to profitability with Q3 FY25 revenues of $32.2 billion and net income of $1.1 billion. Operating income has trended upward through 2025 with refinery utilization hitting 97% and utilization records in the Gulf Coast and North Atlantic regions. Josh — We’ve written about this name before, and it’s been a horse. It’s the best of the three major refiners and so long as gasoline demand remains strong, this one should keep working. Technically, investors can stay long above the recent support that’s been created at $155-$160, which was also support back in September. Traders playing this for a gap and go are already being rewarded as VLO has given nothing back since L’affaire de Venezuela that we began the week with. If they want to get cute with it, they can use the bottom of the gap ($177) for risk management but that risks an obvious whipsaw — I’d use the rising 50-day instead ($172). Remember, this is art, not science. Baker Hughes Co. (BKR): Sean — Baker Hughes (BKR) is a global energy and industrial technology company that provides equipment, services and software across oil & gas, liquid natural gas (LNG), power generation and emerging energy markets. The company has delivered a meaningful financial turnaround and margin expansion, with adjusted EBITDA nearly doubling from $2.4 billion in 2020 to $4.6 billion in 2024 and margins rising from 11.4% to 16.5%, accelerating further to a 17.7% margin in Q3 2025 as revenue climbed to nearly $28 billion. BKR also has a record $32 billion backlog for its industrial and energy technology segment. BKR has an interesting market position as it’s diversified across LNG, secular AI-power demand, decarbonization, and industrial technology capabilities, diversifying its revenues outside of pure energy. Josh — I think BKR retests the gap. The highs we saw earlier this week didn’t quite get back to the December high, which tells you there’s just not much conviction here until a material breach above $50. A strong volume close above that level and you have my full attention. If you simply must own this, $43 is your line in the sand — that’s been support since the fall. Nothing good happens below that level. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. 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Josh Brown: These are the two best energy names in our Best Stocks list
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