Tencent Music Jumps 4.29% To 15-Month High On Heavy Volume Breakout

Tencent Music (TME) rose 4.29% to close at $22.36 on July 17, 2025, extending gains to four consecutive sessions and accumulating a 12.99% advance during this period. This surge materialized alongside above-average volume of 8.05 million shares, signaling robust buying interest.
Candlestick Theory
The price action shows a decisive breakout pattern, with four consecutive bullish candles culminating in a long white candle closing near the session high of $22.50. This sequence confirms a breach of the $21.50-$22.00 resistance zone, which now converts to primary support. The absence of significant upper shadows in the rally underscores strong buying conviction. Key resistance now emerges at the 52-week high of $22.50, with a sustained close above this level potentially opening the path toward $23.50. Immediate support is established near $21.52 (July 17 low), with stronger foundation at $20.67 (July 14 close).
Moving Average Theory
A bullish alignment is evident across all major moving averages. The 50-day SMA ($18.75 estimated) crossed above both the 100-day ($17.30) and 200-day ($15.80) averages in early June, confirming a long-term golden cross. The current price trades 19% above the 50-day SMA – historically a sign of strong momentum – while the ascending order of the SMAs (price > 50d > 100d > 200d) forms a bullish "stacked EMA" configuration. This structure suggests institutional accumulation remains intact barring a decisive break below $21.50.
MACD & KDJ Indicators
The MACD (12,26,9) shows sustained bullish momentum, with the MACD line maintaining its position above the signal line since July 7. The histogram exhibits expanding bars, confirming accelerating upside pressure. Meanwhile, the KDJ oscillator reflects overbought conditions with the latest readings near %K=94/%D=89. While elevated above the 80 threshold, the lack of bearish divergence suggests overbought conditions may persist during this momentum surge. Traders should monitor for KDJ bearish crossovers as early exhaustion signals.
Bollinger Bands
Bollinger Bands (20-day, 2σ) demonstrate an "expansion-pin" pattern indicative of directional conviction. The July 17 candle closed just below the upper band at approximately $22.60, following a 15% band width expansion during the four-day rally. Historically, such volatility expansions after periods of contraction (like the June consolidation) tend to precede directional continuations. The absence of price rejection from the upper band strengthens the breakout thesis, though temporary mean-reversion toward the 20-SMA ($20.20) remains possible.
Volume-Price Relationship
Volume confirmation validates the breakout, with cumulative volume during the four-day rally (27.4 million shares) exceeding the preceding eight down days (24.1 million). The July 17 volume spike (8.05M shares) represents a 76% increase over the 30-day average, coinciding with the highest closing price in 15 months. This volume climax at new highs suggests institutional accumulation. However, volume divergence appeared on July 15-16 as price advanced on declining volume – a cautionary signal requiring confirmation.
Relative Strength Index (RSI)
The 14-day RSI reached 76, entering overbought territory for the first time since April. While conventional interpretation warns of excess, the current reading aligns with strong uptrends where RSI can remain elevated for extended periods. No bearish divergence exists – both price and RSI have recorded higher highs since early July. Traders should watch for RSI retreats below 70 without significant price deterioration as potential consolidation signals rather than reversal indications.
Fibonacci Retracement
Applying Fibonacci levels to the primary uptrend from $12.23 (April 11 low) to $22.50 (July 17 high) reveals critical technical levels: The 23.6% retracement ($20.95) aligns precisely with the previous resistance pivot of June 10. More significant support emerges at the 38.2% level ($19.29), corresponding to the 50-day SMA and July’s consolidation zone. The recent breach of the 161.8% extension level ($21.96) suggests bullish momentum extension is underway, with the 261.8% projection at $26.42 becoming the next major upside target.
Confluence exists at $21.50, where multiple indicators align: This level serves as the breakout point (candlesticks), converges with the Keltner Channel midline, and represents a 1.5x multiple of the Average True Range below the current price. Crucially, three bearish divergences emerged in July: Volume failed to confirm the July 15-16 advance, KDJ approached overbought territory during consolidation, and RSI remained elevated while price stalled. Though not yet sufficient to override the bullish structure, these divergences suggest near-term consolidation may precede further upside. The strongest technical agreement appears in the Golden Cross confirmation, Bollinger expansion, and volume-backed breakout – collectively indicating the intermediate uptrend remains intact.