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.

Source: OSK