Tencent Music: Docked in

TME recently reached our magenta Target Zone (between $9.55 and $6.84) and is now trading just below its upper edge. We expect a deeper dive before the magenta wave (ii) comes to a well-deserved end. With the low in place, the share should then rise again and head for a new three-year high with the same-colored wave [iii]. Investors can therefore play the long side within the Zone, whereby stops could be placed 1% below the lower edge or at the support at $5.70.