Everyone Long Energy — Now What?

XLE

Back in mid-December, we highlighted the massive squeeze risk building in energy: “XLE continues trading inside the huge multi-year range… when that range eventually breaks, liquidity vacuums tend to form.”

Since then, XLE has surged more than 25%. However, momentum has started to fade lately. The ETF is now testing the steep trend line and the 21-day moving average, the first key support levels, so watch closely if XLE closes below them.