Alibaba Group Holding Limited (BABA) is having a rough Friday, with shares dropping after allegations surfaced that the Chinese e-commerce behemoth has been working with the country's military to target the United States. It's the kind of headline that makes investors hit the sell button first and ask questions later.

What's Behind the Allegations?

According to the Financial Times, Alibaba has provided technical support for Chinese military operations. The report cites a White House national security memo containing declassified top secret intelligence, though the Times couldn't independently verify the document.

The memo alleges that Alibaba gave the Chinese government and the People's Liberation Army access to customer data including IP addresses, WiFi information, and payment records. It also claims the company provided various AI-related services to military operations.

Alibaba isn't taking this lying down. The company flatly denied the allegations, calling them false and suggesting the information was deliberately leaked to damage its reputation.

The Technical Picture

Despite today's tumble, Alibaba has been on an impressive run this year, up 79.9% year-to-date. That's some serious resilience, even if short-term volatility is making things uncomfortable.

The Relative Strength Index currently sits at 42.94, putting the stock in neutral territory. It's neither overbought nor oversold at the moment, which leaves things open-ended. Technical support is pegged at $130.06, potentially offering a safety net if the decline continues. On the upside, resistance at $170.55 will be the level to watch for any recovery attempt.

The stock is trading near its 50-day moving average, which could prove pivotal. A bounce here might signal a rebound opportunity, while breaking below could suggest further weakness ahead.

Current Trading

Alibaba shares were down 4.73% at $152.31 at the time of publication Friday. The stock is trading within its 52-week range of $80.06 to $192.67, well off its recent highs but still significantly above its lows from earlier in the year.