BHP Share Price: Is it Time to Cash In?

BHP share price has been trading sideways recently after the Australian miner announced its plans to close off one of its mines earlier than expected. However, the stock has staged a substantial recovery since the beginning of the year. At the time of writing, the BHP stock was trading 0.93% higher at A$49.82.

What Lies Ahead?

BHP Group Limited is the world’s largest miner that engages in the exploration, development, processing, and production of iron ore, coal, and copper. BHP’s shares have been under intense pressure for the past few days despite recently posting a record iron ore production for its fiscal first half.

The S&P/ASX 200 listed miner announced on Monday that it may close its NSW Mt Arthur coal mine four years earlier than it had planned. New South Wales recently proposed that thermal coal miners set aside nearly 10% of their annual production for use by coal-powered power stations within the state. BHP and other coal miners in the state are displeased with the NSW government’s plans for coal mines.

Jed Richards, a senior investment advisor at Shawn and Partners, handed BHP shares a “Sell” rating, pointing to the impact of commodity prices on investor sentiment. Richards said:

“Investors will be closely monitoring iron ore, copper, and coal prices during the next 12 months…The macro backdrop is still fragile given global growth is slowing. Iron ore prices are now softer than in previous years. Costs continue to increase and port facilities are operating at maximum capacity.”

BHP Share Price Forecast

BHP shares have climbed more than 8% in the year-to-date, pointing to a strong recovery. The stock has maintained its position above the 50-day and 200-day exponential moving averages (EMA). It has also remained above the 25-day and 50-day moving averages. Its Relative Strength Index (RSI) has tilted higher to 66.

Therefore, I think the decline is only short-term. A move past the key resistance level at A$50 will have buyers pushing the BHP stock price higher to A$52.20.

BHP Price Chart

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