Underscoring the potential risks to XLE and VDE ahead of a spate of vital earnings reports is the fact that both have already proven vulnerable since earnings season began. Since last Friday when Schlumberger (NYSE: SLB), a top-five holding in both funds, reported, both ETFs are down more than 1% as earnings from other oil services firms such as Halliburton (NYSE: HAL) and National Oilwell Varco (NYSE: NOV) have come in.

Making matters all the more ominous for XLE is that if Coe’s prediction is correct and the ETF returns to the $76 area, it would be supported by its 200-day moving average. If that area were to be violated, selling pressure would likely intensify

Energy Select Sector SPDR

ETF Trends editorial team contributed to this post.