NEW YORK (TheStreet) - The S&P 500 ETF (SPY) is continuing its rally higher, up 0.7% on Wednesday. 

However, on CNBC's "Fast Money Halftime" show, Pete Najarian, co-founder of optionmonster.com and trademonster.com, explained why he's got his eye on the CBOE Volatility Index (VIX.X) . Now that it has fallen below $20 and stayed below that level for a few trading sessions, he suggests investors buy some protection.

As for energy, the sector has been quite strong lately, Najarian said. With the Energy Select Sector SPDR ETF (XLE) having rallied almost 10% in the past five trading sessions, he has booked most of his profits in the sector. However, one stock he just bought is Chevron (CVX) . 

Jon Najarian, co-founder of optionmonster.com and trademonster.com, also sold most of his energy holdings as oil prices approached $50 per barrel earlier in the day. With the commodity price up, oil companies will likely increase production in order to generate more cash flows. 

Josh Brown, CEO and co-founder of Ritholtz Wealth Management, called it a "classic junk rally" over the past few days, where the worst performing stocks tend to lead the market higher. It makes sense, as short-sellers cover and those waiting to buy add fuel to the fire. Investors shouldn't make too much fuss about those rallies. 

Kevin O'Leary, co-founder of O'Leary Funds and a co-host on Shark Tank, acknowledged that low oil prices are bad for energy companies, but for all the other companies and consumers as a whole, it's a good thing as gas prices and input costs fall. He's not bullish on oil prices going forward, and prefers for the commodity to stay under pressure. 

Brown agreed that $50 oil is better than $100 oil for the economy as a whole. However, he also pointed out that low oil prices weighs on the S&P 500 earnings, which is bad for investors that look at the market as a whole, rather than specifically at each sector. 

The conversation turned to dividend stocks, as O'Leary explained that over the past 40 years, 70% of returns have come from dividends. High quality companies with attractive dividends not only boost returns, but they are less volatile during tough times in the market - such as in August. 

A few of Jon Najarian's top dividend picks include American Capital Agency (AGNC) and NuStar Energy (NS) . His brother Pete Najarian likes Target (TGT) , which pays a dividend yield close to 3% and has increased its annual payout for 44 consecutive years. 

Another stock that has a nice dividend yield - 1.8% - is EMC Corp. (EMC) . The company also has upside to $30, Pete Najarian said. 

Interestingly enough, Institutional Investor's top-rated technology analyst Toni Sacconaghi has an outperform rating and $30 price target on EMC. Sacconaghi, a senior equity analyst at Sanford Bernstein, says the company has activists pushing for change, and it will likely bode well for investors. 

He also likes HP  (HPQ) and Apple (AAPL) . The former has a low valuation, while the stock has been beaten down this year and has an upcoming catalyst later this year with its split-up. Apple is a more emotionally driven stock, he said, but all hope hinges on the iPhone. A 5% drop in iPhone sales will likely push the stock below $100. But since slowdown fears are already so a high, a 5% increase in iPhone sales could heat the stock up and push it towards $150. 

O'Leary said Apple has been a frustrating stock to own, and that he's becoming increasingly worried about its dependency on the iPhone.

Jon Najarian said he's looking to buy SanDisk (SNDK) on a pullback.

 

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.