Tencent Music Rebounds 3.39% As Technical Indicators Signal Potential Trend Reversal

Tencent Music (TME) rose 3.39% in the latest session to close at 23.19, recovering from a low of 22.22 hit three days prior on elevated selling volume. This move forms part of a consolidation phase following a steep 16% decline from its September peak of 26.70, with recent price action showing signs of stabilization near key technical levels.
Candlestick Theory
Recent candlesticks reveal a potential bullish reversal pattern. The October 10th session printed a long red candle closing near lows (22.43) on high volume, signaling capitulation. This was followed by three consecutive green candles, culminating in the latest white body closing above the midpoint of its range. The 22.20-22.50 zone now establishes a clear support floor, while resistance crystallizes at 23.75-24.00 – the upper wick rejection area from October 9th and September 24th.
Moving Average Theory
The moving average configuration reflects bearish near-term momentum but retains intermediate bullish structure. Price currently trades below the flattening 50-day SMA (approximated at 23.80), suggesting short-term weakness. However, it holds above the rising 100-day (est. 21.50) and 200-day (est. 18.20) SMAs, confirming the primary uptrend remains intact. A decisive close above the 50-day SMA could signal trend resumption.
MACD & KDJ Indicators
MACD shows tentative improvement with its histogram lifting from deep negative territory following a bullish crossover in the signal line. This divergence suggests waning downward momentum. KDJ readings exhibit greater clarity – the %K line (55) crossed above %D (45) from oversold territory (<30 on October 10th), while J-curve (75) approaches but remains below overbought thresholds. Convergence between these oscillators supports near-term upside potential.
Bollinger Bands
Volatility contraction is evident as bands tighten to their narrowest width in two months (22.00-24.50 range), following September’s high-volatility breakdown. Price rebounded precisely from the lower band (22.22) and now tests the mid-band (23.40), implying a pending volatility expansion. Closure above the mid-band would signal bullish bias and target upper band resistance at 24.50.
Volume-Price Relationship
The validity of the recent bounce is questioned by subdued volume dynamics. While the breakdown to 22.22 occurred on 7.88M shares (highest volume in two months), the recovery transpired on progressively lower volume (5.48M→3.75M). This divergence suggests limited conviction behind the rebound. Sustained advances require volume expansion exceeding the 5.5M share average observed during prior uptrend legs.
Relative Strength Index (RSI)
The 14-day RSI (47) has rebounded from near-oversold conditions (34 on October 10th) but remains below the bullish 50 threshold. This recovery slope remains shallower than price ascent, indicating modest momentum. While avoiding extreme readings warns against overreliance, RSI’s position below the 50 midline continues to favor sellers. Confirmation of strength would require RSI sustaining above 52-55 during rallies.
Fibonacci Retracement
Applying Fibonacci to the September-October decline (26.70 → 22.22) reveals immediate resistance at the 23.6% level (23.28) – precisely where the latest session closed (23.19). The subsequent 38.2% retracement (23.93) aligns with the breakdown gap from September 30th, creating formidable overhead resistance. Support now holds at the 78.6% extension (22.35), with a breach below reopening downside toward 21.50.
Confluence exists at 23.30-23.50 where the 23.6% Fibonacci level overlaps with Bollinger mid-band and September’s swing low – a critical breakout zone. Notable divergence emerges between improving momentum oscillators (MACD/KDJ) and tepid volume support for the rebound, suggesting cautious interpretation of recovery signals. Probability favors range-bound trading (22.20-24.00) until either volume validates upside or Fibonacci resistance rejects advances.