We study the phase stability and martensitic transformation of orthorhombic and monoclimic polyethylene by means of density functional theory using the nonempirical consistent-exchange vdW-DF-cx functional [Phys. Rev. B 89, 035412 (2014)]. The results show that the orthorhombic phase is the most stable of the two. Owing to the occurrence of soft librational phonon modes, the monoclimic phase is predicted not to be stable at zero pressure and temperature, but becomes stable when subjected to compressive transverse deformations that pin the chains and prevent them from wiggling freely. This theoretical characterization, or prediction, is consistent with the fact that the monoclimic phase is only observed experimentally when the material is subjected to mechanical loading. Also, the estimated threshold energy for the combination of lattice deformation associated with the T1 and T2 transformation paths (between the orthorhombic and monoclimic phases) and chain shuffling is found to be sufficiently low for thermally activated back transformations to occur. Thus, our prediction is that the crystalline part can transform back from the monoclimc to the orthorhombic phase upon unloading and/or annealing, which is consistent with experimental observations. Finally, we observe how a combination of such phase transformations can lead to a fold-plane reorientation from {110} to {100} type in a single orthorhombic crystal.