Alibaba Group Holdings, Inc (NYSE:BABA) stock is rallying in Thursday's trading session after closing slightly lower on Wednesday.

Traders and investors are optimistic that beaten down Chinese-based stocks could regain ground as China eases regulatory restrictions on its big tech companies in an attempt to revive its economy.

JPMorgan’s flagship China fund has increased its position in Alibaba, according to filings submitted in May. The fund sees China’s harsh regulatory crackdowns nearing an end and noted China’s tech sector provides “critical value” to its customers.

The easing of China’s multipronged crackdown on its tech companies could definitely boost Alibaba’s stock, which is trading down about 67% from its Oct. 27, 2020 all-time high of $319.32.

The general markets could hamper a larger swing to the upside, with the S&P 500 officially in a bear cycle after plunging more than 20% off its all time high on June 13.

The direction Alibaba will head in, at least for the short-term, looks set to be determined soon because the stock has set itself into a symmetrical triangle pattern on the daily chart. A break from the formation is likely to set the path ahead.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Alibaba Chart: Alibaba began trading in a symmetrical triangle pattern on June 8, although the stock had been holding above the lower ascending trendline of the formation since June 3.

Alibaba is set to meet the apex of the triangle on June 28, and traders and investors can watch for a break up or down from the pattern on higher-than-average volume in order to gauge future direction.