Don’t trust crude’s bounce – the chart is still a disaster: Technician

Crude oil is rallying, but one top technician warns that the recent rebound is nothing more than a value trap.

"The question is, did anything really change? Is crude just like every other time over the past year, just rebounding after a big sell-off? I really do think that's what it is," Carter Worth of Cornerstone Macro explained Friday on CNBC's "Options Action."

Oil has surged more than 6 percent in the past week — hitting its highest level since April 28. However, Worth warned, "All you can do this week is get right back to the scene of the crime. It's not random, and it's stuck. The question is, is this some great opportunity? It's just a rebound in an ongoing problem."

While crude is currently trading above both its 50- and 200-day moving average levels, "I think energy has plenty downside relative to the market," Worth explained. "[It's a] disaster. We know the [energy] sector over the last 5 years bounced off the low, it's a big move up, and the reality is it's making new 13-year lows [relative] to the market."

Analyzing a chart of the XLE, the ETF tracking energy, Worth also noted that "it is a well-defined trend [downward] … I want to be underweight energy. I want to be short energy."

Crude oil was trading at the $49.19 level during Monday's trading session.

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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