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It could be a long time before it's safe to buy oil

Despite the recent rally, it still might be too soon to bet on oil, traders say.

Crude oil jumped more than 3 percent Monday, the latest move in a series of sharp swings for the beleaguered commodity. Ari Wald, head of technical analysis at Oppenheimer, said although there are signs of calmer waters ahead, he doesn't see a safe time to buy just yet.

"We are starting to see some signs of stabilization, that is encouraging," Wald said Friday on CNBC's "Trading Nation." "However, we are recommending that our clients don't play for the upside here, that more needs to be done."

Read MoreUS oil prices surge 3% after US drilling falls

Wald said that when oil hit a new multiyear low in August of $38 a barrel, the weekly momentum was at a higher level than it was at previous lows for crude. This indicated that the selling strength had lessened, which could mean the potential for basing over the next few months, he said.

However, the longer-term trend remains downward, he said, with the 200-day moving average still on the decline.

"We'd rather sell the pop than play for it," Wald said.

In a Friday note, Robert Friedlander of Brean Capital noted that although oil has bounced in the past week, the commodity could still see some swings off the Fed's decision this month to keep interest rates low.

"It's been a good week for the crude bounce and $54's before $39's still looks possible," Friedlander wrote. "We're concerned that the WTI path to 54 (if it's really in play) could go through $42 if the FOMC headline spurs some 'normal' rerisking which for many probably involves an energy short against growth longs."

Goldman Sachs also recently cut its forecast for oil, saying that prices will likely remain lower for longer and that crude could fall to $20 a barrel.

In a Monday note, Brian Kinsella, Goldman Sachs' energy and utilities sector specialist, wrote that "While we do not believe investor expectations for 2016 oil prices are as low as our own, directionally there is far more appreciation/buy-in to a lower-for-longer thesis and for the need for U.S. production to decline in 2016."

Read MoreGoldman: This may push oil to $20

According to reports from the U.S. Energy Information Administration, commercial crude oil inventories declined for the week ended Sept. 11, and U.S. drilling activity has fallen. However, stockpiles of petroleum products have reached 1.3 billion barrels, a record high.

"U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years," the most recent EIA petroleum status report said.

Read MoreThis will be the next spark for a selloff in oil

Erin Gibbs, equity chief investment officer of S&P Capital IQ, said because of the continued supply glut, she doesn't see real growth in oil occurring until the second half of 2016.

"When you have supplies at their highest levels, this is not the place where you'd expect oil to go up," Gibbs said Friday on "Trading Nation." "We just don't see the fundamentals and the demand to push the prices back up right now."

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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