If a fair value gap, order block, or a previously untested point of control is present near this low, these can be both powerful magnets for the price as well as low-risk places to enter long positions.
The same concepts are true in downtrends. Measure a fib sequence from the high to low of the previous swing and find where the price is relative to the fib levels. If the price has overshot the .50-.618 Fib levels, look for FVGs, Order Blocks, or untested points of control above the current price to consider short positions, and use the previous swing high as your stop loss.
