Tencent Music Jumps 4.45% as Technicals Signal Sustained Bullish Momentum

Tencent Music (TME) rose 4.45% to close at $20.67 in the latest session, continuing its upward momentum. The stock demonstrated notable strength with strong buying activity evident in higher-than-average trading volume. Throughout the year, TME has progressed from near $10 to its current level, reflecting a robust bullish trend. Technical indicators provide key insights into potential future movements.
Candlestick Theory
Recent candlestick patterns reveal significant price action dynamics. The most recent session formed a long-bodied bullish candle that closed near its high of $20.805, overpowering the previous day's bearish candle and establishing a bullish engulfing pattern. Key resistance is evident near $20.85 (July 8 high), which aligns with the year-to-date peak. Support rests at $19.74 (July 14 low), reinforced by the $19.17–$19.57 consolidation zone from early July. A decisive close above $20.85 may trigger further bullish momentum, while failure to hold $19.74 could signal short-term consolidation.
Moving Average Theory
TME trades comfortably above all major moving averages, confirming a sustained bullish trend. The 50-day MA (approximately $18.45) and 100-day MA (approximately $16.75) both slope upward, while the 200-day MA (approximately $14.20) maintains a steady ascent. The alignment—with price above the 50-day, 50-day above 100-day, and 100-day above 200-day—forms a bullish "stacked" configuration. This structure suggests strong underlying trend strength, though a pullback toward the 50-day MA around $18.50 could offer a buying opportunity if volatility emerges.
MACD & KDJ Indicators
The MACD (12,26,9) shows bullish momentum, with the MACD line crossing above its signal line in late June and the histogram expanding positively through mid-July. This signals accelerating upward momentum. Concurrently, the KDJ oscillator (14-period) indicates an overbought condition, with the K and D lines near 85—above the 70 threshold. While this may precede short-term consolidation, the MACD/KDJ confluence suggests any pullback is likely a correction within the dominant uptrend rather than a reversal. Divergence is absent, supporting trend continuity.
Bollinger Bands
Bollinger Bands (20-day, 2σ) highlight rising volatility and bullish price positioning. The July 14 close near $20.67 pushed against the upper band (approximately $20.50), reflecting strong upside pressure. Band expansion from mid-June to early July signals increasing momentum, while the price's consistent upper-band proximity underscores bullish conviction. However, this positioning may induce short-term profit-taking. Support resides near the 20-day SMA (around $19.50), with a sustained break below potentially triggering a test of the lower band near $18.50.
Volume-Price Relationship
Volume analysis validates recent price strength. The July 14 rally occurred on 7.42 million shares—the highest volume since late June—confirming buyer commitment. Notably, the May 14 surge (15.66% gain) saw volume spike to 21.95 million shares, establishing a foundational breakout. Since then, moderate volume during pullbacks (e.g., July 11 at 4.76 million shares) coupled with volume expansion on up days (e.g., July 8 at 9.19 million shares) signals accumulation. This volume profile supports sustainable upside if accompanied by ongoing volume confirmation near resistance zones.
Relative Strength Index (RSI)
The 14-day RSI trades near 75, entering overbought territory (>70). While this warrants caution about near-term exhaustion, it aligns with TME's structural uptrend—similar RSI levels in May and July preceded continuations rather than reversals. Probabilistically, RSI above 70 in strong trends may persist during momentum surges. However, a bearish divergence would form if price makes new highs while RSI retreats—a development not currently observed. Traders should monitor for RSI rejection near 80, which could precede consolidation.
Fibonacci Retracement
Applying Fibonacci levels to the primary swing low ($11.12 on August 13, 2024) and high ($20.85 on July 8, 2025) reveals key retracement supports. The 23.6% level ($18.55) held during July’s pullback (July 2 low: $19.17), underscoring its strength. The 38.2% level ($17.13) aligns with the June consolidation zone. As TME tests the $20.85 swing high, a breakout could target extension levels (127.2% near $23.50), while rejection near $20.85 may retest $18.55. The confluence of $18.55 with the 50-day MA reinforces its technical significance.
Confluence and Divergence
Notable confluence occurs around $20.85, where historical resistance, Bollinger Band proximity, and Fibonacci swing-high alignment could amplify selling pressure. Conversely, the $18.50–$19.50 zone combines 50-day MA support, Fibonacci 23.6% retracement, and Bollinger mid-band reinforcement. Divergence is currently absent; MACD, KDJ, and RSI trends align with price action. The primary cautionary signal arises from RSI and Bollinger Band overbought readings, suggesting near-term risk of consolidation without overt reversal evidence.