Oil's breakout just 'failed miserably': Trader

More pain coming for this battered sector

If you're looking to see a sharp move in oil prices off Friday's OPEC meeting, you may be disappointed.

That's because despite Thursday's 3 percent plunge in oil prices, which put energy stocks at a two-month low, one strategist argues that when it comes to the overall space right now, what you see is what you get.

"I don't think we're going to see oil go much higher, but I also don't see it going much lower," Boris Schlossberg, head of FX Strategy at BK Asset Management, said Thursday on CNBC's "Trading Nation." He spoke a day before OPEC agreed to maintain production levels.

Schlossberg suggested that oil has found its equilibrium in its current range. Although it has the potential to hit support at $50, it's not going to be "flooded like it was earlier in the year, where it got liquidated by so many speculative shorts," he said.

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Technical analyst Rich Ross agreed that there wouldn't be a sudden surge or drop in oil in the near term. Ross noted that the commodity has been bouncing around a $4 range since the start of May, with $57 on the low end and $61 on the high end.

"We tried to break out of this range earlier this week and it failed miserably," he said. Crude closed above $61 on Tuesday for the first time this year before falling below $58 on Thursday.

What makes that failure troubling, said Ross, is the backdrop of a weaker dollar and better-than-expected inflation data out of Europe. "Both should be good for crude and the fact that crude didn't continue to rally tells me that if we don't like what we see [Friday] out of OPEC, we could hit $54."

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According to Ross, the chart for energy stocks looks even worse than crude oil itself.

"The energy ETF has actually performed far worse than crude, which has held up on a relative basis," said Ross, head of technical analysis at Evercore ISI. Year to date, crude is up 7.5 percent, while the XLE, the energy ETF, is down more than 2 percent. This bearish divergence, said Ross, prompts him to "be on the short side in energy."

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