Previous strengthening mechanisms described in literature for high density polyethylene (HDPE) carbon nanotubes composites are typical of those observed in fibre reinforced polymeric micro composites. Here, we present a new molecular level strengthening mechanism based on HDPE carbon nanotubes composite, which has not been reported before to the best of authors’ knowledge. The HDPE nanocomposite was produced by melt intercalation technique via twin-screw extrusion. Thereafter, the samples were subjected to mechanical tensile tests and scanning electron microscope (SEM) examination. Carbon nanotubes (CNTs) were found to be disentangled from the polymer molecules after yielding and prior to breaking. SEM and optical microscopic observations revealed visible black agglomerate bands at 45° appeared after yielding and prior to the breaking of the ductile HDPE. It was observed that CNTs were pushed out from the intricate mechanical interlocking with the thermoplastic polymeric chains of HDPE during strain hardening.