Alibaba Group Holding (BABA  ) stock has largely been out of investor favor for the past year.

The stock is down over 20% in the past year, and down 2.7% year-to-date. However, the stock has recently demonstrated momentum as China kicked off its eight-day Spring Festival holiday for the Year of the Dragon.

China Spring Festival Lends Momentum To The Stock

This year, the festival kicked off on Feb. 10 and would last the usual 23 days. The China Spring Festival, also known as the Chinese New Year, is a significant cultural and economic event in China. Its impact usually extends to various sectors, including e-commerce stocks like Alibaba.

• Consumer spending tends to increase before the festival as people purchase gifts, decorations, and festive goods. To this end, Alibaba's various platforms, such as Taobao and Tmall, experience a spike in activity as consumers turn to online shopping for convenience.
• Digital red packets, a modern take on the traditional practice of giving money during the Spring Festival, have become popular through mobile payment platforms. Here's where Alibaba's financial arm, Ant Group, plays a role in digital payments facilitation.

Driven by these factors, Alibaba stock has been rising on momentum. Price charts (above) also indicate an RSI (Relative Strength Index) crossover above 50.

The RSI is a momentum oscillator that measures the speed and change of price movements, and it ranges from 0 to 100.

An RSI crossing above 50 indicates that the recent upward price movements are gaining strength, and positive momentum is building in the market. Traders may interpret this as a sign that the stock is in an uptrend. However, it should be used in conjunction with other relevant information and analysis tools to gain a more comprehensive understanding of market conditions.

BABA Price Action: Alibaba stock was trading at $75.85 at the time of publication.