So here's a fun thing that happens in markets sometimes: a regulator says "stop competing so hard," and the stocks of the companies that were competing go up. That's basically what happened Wednesday with Alibaba Group Holding Ltd (BABA) and Meituan (MPNGY).

Shares of both Chinese tech giants rallied after reports that China's intense food-delivery price wars are coming to an end. The State Administration for Market Regulation effectively gave the industry a thumbs-up to stop the bloodletting, reposting a state media opinion piece that called for an end to the price competition.

The report, according to Reuters, said "The entire industry has fallen into a vicious cycle of losing money in an attempt to grab market share, ultimately dragging down the broader trend of consumption recovery."

Think about that for a second. When regulators usually step in, it's to protect consumers from high prices. Here, they're stepping in to protect companies from low prices. The message is pretty clear: everyone losing money to grab market share isn't helping anyone, including the broader economy. So maybe, just maybe, it's okay to make a profit.

The market loved it. Meituan surged as much as 13.92% in afternoon trading. Rival JD.com (JD) also saw gains exceeding 3% in Wednesday premarket. It was a broad sigh of relief across the sector.

For Alibaba, this regulatory shift comes as it's already trying to play a smarter game. The company recently rebranded its Ele.me food delivery service to Taobao Instant Commerce. The strategy isn't about being the cheapest anymore; it's about focusing on higher-value food orders to improve what finance people call "unit economics"—basically, making more money on each order.

In its latest fiscal report, Alibaba noted that expanding its quick commerce business improved user efficiency. Translation: they're trying to get better customers, not just more customers.

Now, let's talk about the stock chart, because the news is good but the picture is still messy. Alibaba is trading 3.4% below its 20-day simple moving average and 15.8% below its 100-day simple moving average. That keeps the intermediate trend pointed down, even as the stock tries to bounce on this news.

Shares are down 5.48% over the past 12 months and are currently positioned closer to their 52-week lows than highs. The Relative Strength Index (RSI) is at 31.58, which sits in neutral territory but is coming off an oversold signal that triggered on March 19. The MACD is at -7.1616 versus a signal line of -6.7865.

For the traders watching the levels, key resistance sits at $139.00, and key support is at $128.50. Alibaba shares were up 3.84% at $130.30 during premarket trading on Wednesday, according to market data.

So here's the takeaway: The regulator just gave the industry permission to stop competing on price. That's a huge deal for profitability. But for Alibaba's stock, one day of good news doesn't erase a longer-term downtrend. The company is pivoting to a smarter strategy, and the government is now cheering for that pivot. Whether that's enough to turn the chart around is the next question.