BHP share price has been dragging the S&P/ASX 200 index for the past few days after the company announced its first-half earnings report. The BHP stock price has been on a four-day downward trajectory, slipping by 9%. The stock has also declined 3.49% in the year to date.

Underperformance?

BHP share price has been under intense pressure for the past few days after the mining company announced its operating and financial. The world’s biggest miner sliced its dividend after rising costs and softer commodity prices drove a decline in half-year profits.

The Australian mining company recently announced a first-half dividend of 90 cents per share, on the back of solid operating performance. Even so, this was lower compared to last year’s record of $1.50 per share. Underlying profit from continuing operations plunged 32% to $6.6 billion in the six months to December 2022.

The prices for key BHP commodities, from iron ore to copper fell in the first half of 2022 against the backdrop of China’s covid-19 restrictions and the aggressive tightening of monetary policies by central banks. According to BHP, significant wet weather in its coal assets affected production and unit costs, as did challenges in securing sufficient labor.

 BHP’s Chief Executive Officer, Mike Henry said in a statement,

“We are positive about the demand outlook in the second half of FY23 and into FY24, with strengthening activity in China on the back of recent policy decisions as the major driver. We expect domestic demand in China and India to provide stabilizing counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan, and Europe. The long-term outlook for our commodities remains strong given population growth, rising living standards, and the metals intensity of the energy transition, including for steel-making raw materials.”

BHP Share Price Forecast

BHP share price has been under intense pressure for the past few days, falling more than 7% in the past week. At the time of writing, the BHP stock price was trading 3.12% lower at A$44.50. On the daily chart, the stock is trading below and slightly above the 50-day and 200-day exponential moving averages, respectively. Its Relative Strength Index (RSI) has slipped below the neutral zone.

Therefore, I expect the BHP stock to plummet further in the short term. If this happens, the next support levels to watch will be A$43.20 and A$39.80. On the flip side, we cannot rule out a flip above the important level of A$49.50.