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As oil prices have bounced back in the last three months, the SPDR Energy Select (ETF) ($XLE) has also seen a recovery. Energy sector was hammered after mid-2014 as oil prices collapsed. But as outlook has improved for oil markets, smart money is once again coming back.

The question is how much more upside XLE has. The fund has already gained almost 18% in the last three months alone. However, as the chart below shows, the fund is still well off the levels it was trading at in mid-2014.

Screen Shot 2016-05-26 at 8.27.04 PM

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In fact, XLE is still well-off the levels it was trading at around this time last year. Given that the outlook for oil is continuing to improve, XLE could see at least 20% upside from current levels.