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After consolidating the Sept 2011-Jan 2012 rally for about 9 months, Petronas Chemicals finally failed to hold the RM6.31-RM6.73 consolidation phase and eventually dipped below the RM6.73 level two weeks ago. This breakdown actually marked the end of its sideways trend and its share price has been falling since then.
The violation of the consolidation phase also led to another major breakdown from the RM6.19 major low last week. Without taking a breather from last week's carnage, Petronas Chemicals continued to face heavy selling pressure and the selling turned into panic when another crucial low of RM5.80 was also violated yesterday.
Unless the stock could close back above the RM5.80 level by the end of this week, the stock may eventually retrace further, potentially towards the RM5.42 level or even into the RM5.20-RM5.23 area. Having said so, even if it fails to return back above the RM5.80 level, the process of retracing towards the abovementioned levels may not be immediate as it is now entering the oversold territory, according to its weekly RSI of 21.7 pt-level. This means that the stock may likely take a breather first before retracing further.
From the current level, look for an immediate support at the RM5.42 level, followed by the RM5.20-RM5.23 support area. To the upside, look for the violated RM5.80 level as the immediate resistance, followed by the RM5.33, RM5.93, RM6.19 and RM6.31 levels.