Tencent Music Jumps 3.85% As Technicals Signal Bullish Breakout

Tencent Music (TME) closed at $21.33 on August 4, 2025, gaining 3.85% with trading volume of 4.39 million shares. This bullish momentum warrants comprehensive technical examination.
Candlestick Theory
Recent candlestick patterns indicate consolidation with a bullish breakout. The August 4 session formed a strong white candle closing near the high ($21.5) after a hammer pattern on August 1 ($20.06 low). Key resistance is established at the July 17 peak of $22.36, while support converges near the 50-day moving average and the July 11 swing low of $19.79. The breakout above the July 30 doji high ($21.75) confirms buyer conviction.
Moving Average Theory
The 50-day SMA ($19.85) maintains an upward trajectory above the 100-day SMA ($18.20) and 200-day SMA ($14.90), confirming a long-term bullish structure. Price trading above all three averages signals sustained upward momentum. The 50/100-day golden cross in mid-June remains intact, though proximity to the 50-day SMA warrants monitoring for potential mean reversion.
MACD & KDJ Indicators
MACD (12,26,9) shows a bullish crossover emerging above the signal line, with histogram bars turning positive on August 4. KDJ (9,3,3) positions: K-value (78) crossing above D-value (72) while J-value (90) approaches overbought territory. Though not yet extreme, KDJ's ascent alongside MACD's positive turn suggests strengthening momentum. Divergence occurred on July 18 when price hit $22.36 while KDJ peaked lower – a warning now invalidated by recent breakout.
Bollinger Bands
Bollinger Bands (20,2) show volatility expansion after a contraction period in late July. Price breached the upper band ($21.20) on August 4 – typically indicating overextended conditions – but this breakout was supported by rising volume. Band width expansion suggests continued volatility, with the middle band ($20.40) now acting as dynamic support.
Volume-Price Relationship
Volume surged 25% during the August 4 rally compared to the 30-day average, confirming bullish conviction. Notable accumulation occurred during the July 14-17 advance (7.4M avg volume) versus lighter sell volume during the subsequent pullback. The volume profile highlights strong support at $20.50, where multiple high-volume reversal candles formed.
Relative Strength Index (RSI)
RSI(14) reading of 67 approaches overbought territory but hasn't breached the 70 threshold. Current momentum aligns with the prevailing uptrend where RSI has repeatedly peaked near 75 before consolidation. Bearish divergence remains absent; however, RSI's approach to 70 increases near-term reversion probability, particularly given the August 4 close near range highs.
Fibonacci Retracement
Tracing the primary swing from the September 2024 low ($9.41) to July 2025 high ($22.36), key levels emerge: 23.6% ($19.30), 38.2% ($17.40), and 61.8% ($14.36). Price consolidated between the 23.6% and 0% extension before breaking upward. For the recent pullback (high $22.36 to low $19.79), the 61.8% retracement at $21.38 aligns with the August 4 high and may present immediate resistance. Confluence exists here as the psychological $21.50 level capped advances twice in July.
Concluding Synthesis
Multiple indicators align bullishly: Moving average structure confirms the uptrend, MACD/KDJ momentum is accelerating, and volume validates the breakout. However, RSI nearing 70 and price testing the 61.8% Fibonacci retracement resistance at $21.38 warrants caution. A decisive close above $21.50 would target the $22.36 all-time high, while failure to hold $20.40 (Bollinger midline, 50-day SMA confluence) may signal consolidation. The confluence of volume-supported price action, momentum resurgence, and Fibonacci levels provides high-probability trade planning parameters.