Dow Chemical is in the news today after the U.S. Environmental Protection Agency (EPA) said late Friday that it warned Dow of potential clean-air and hazardous-waste violations stemming from its Midland, Michigan plant. According to the EPA allegations, Dow failed to follow proper regulations to detect and repair leaks and also neglected to perform a required test of its stacks. The cherry on top was a charge that Dow violated requirements for dealing with its hazardous waster.

The EPA did note that these findings were preliminary. Dow has 30 days from the original receipt of the warning to meet with the EPA to discuss a resolution for the charges.

DOW shares have pulled 1.3% lower today, continuing a sharp short-term downtrend. Since last Tuesday, the shares have given back nearly 8% of their value. This has taken the stock below its flattened 20-month moving average, which has not been breached on a monthly closing basis since last December.

The stock is also now trading below the 45 and 50 strikes, home to peak call open interest in the December and January series. If the stock attempts a recovery, it could be met with some options-related resistance, compiled with technical resistance in the form of the 20-month and additional moving averages.