Alibaba Group Holding Ltd - ADR (NYSE:BABA) shares are trading higher Wednesday following data that showed China's inflation rose slower than expected in December, which increased optimism about the easing of policy. The stock looks like it may be finally turning around as it approaches support in a downward channel.

Alibaba was up 3.58% at $136.85 Wednesday afternoon at publication.

See Related: Why Alibaba And Pinduoduo Shares Are Rising

Alibaba Daily Chart Analysis

• The stock is nearing resistance in what traders call a downward channel. The stock has been unable to cross the pattern resistance in the past which has led to a downward trend. If the stock can cross above this resistance line it may see a change in trend and could begin to form an upward trend.
• The stock crossed above the 50-day moving average (green) but trades below the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation. The 50-day moving average may now hold as an area of support, while the 200-day moving average may act as resistance.
• The Relative Strength Index (RSI) has been climbing higher the past month or so and sits at 60. This shows buyers have been moving back into the stock and signals a reversal may be happening.

What’s Next For Alibaba?

Photo: Courtesy Alibaba