Energy is still a hot sector, China and India keep using more oil, yadda yadda. You probably know the fundamentals of this story by now as well as or better than we do. But this is a trade, not an investment.

The thesis: The energy sector is short-term very overbought. The RSI(2) reading on the energy ETF (XLE) is at 97.26; fast stochastic readings are well above and slow stochastic readings are almost at overbought levels, and the stock is pushing near its upper Bollinger band. The stock bounced off its 200MA on Friday and crossed above the 50MA on Tuesday, but may be pushing up into some significant resistance.

The trade: Energy stocks can...