BHP Shares On Edge of Technical Breakdown, As Momentum Shifts

BHP shares (ASX:BHP) pulled back further on Friday, sliding to the edge of a technical bear market as a drop in copper prices and a decisive break below a key long-term moving average rattled confidence.

The BHP share price closed down 3.64% at A$55.05, extending a pullback that now stands at 19.95% from the highs reached two months ago, within touching distance of the 20% drop that defines a bear market. The move was enough to push the stock below the 200-day SMA at A$57.70, a technical level closely watched as a marker of a long term trend.

This puts the stock into a zone between A$55.00 and A$56.00, a band that previously acted as resistance on the way up and is now being tested as support. The bearish shift momentum can also be seen in the RSI, down at 31.79, on the brink of oversold into the weekend. This was a widespread move across the sector, as the ASX Materials Index (XMJ) dropped 3.85% on Friday and has shed 19.7% over the same two-month window, while sitting at just 0.52% in the green for 2026.

Why are BHP shares down?

The latest move was a renewed and broad-based sell-off in industrial metals, led by copper. LME benchmark copper fell 1.8% to US$14,105.50 per tonne, touching an intraday low of US$14,076 per tonne, and extending the retreat from last month’s record high of US$14,875 per tonne. The pullback has now erased a meaningful portion of the gains that drove copper to all-time highs, and the structural drivers behind the retreat are becoming harder to dismiss as temporary noise.

A sudden and significant surge in LME on-warrant inventories, up 70,100 tonnes over just two trading days, was a primary driver of the deterioration. The bulk of those inflows were concentrated in US warehouse hubs, including New Orleans and Baltimore, as steep LME backwardation created a financial incentive for traders to deliver physical metal against short positions rather than roll contracts forward. The move effectively undermined the physical scarcity narrative that had underpinned much of copper’s record-breaking rally.

The broader macro backdrop compounded the pressure. A tech-sector sell-off has weighed on risk appetite globally, and persistent weakness in China’s property sector continued to cloud the demand outlook for industrial metals, which remain heavily exposed to Chinese construction and infrastructure activity.

Beyond the commodity price environment, BHP’s own operational performance has added a layer of fundamental concern. The company’s most recent quarterly production update revealed a 19% year-over-year decline in copper output to 400.7 kilotonnes. The flagship Escondida operation in Chile, the world’s largest copper mine and a cornerstone of BHP’s copper growth strategy, recorded a 23% year-over-year production decline, attributable to a combination of planned lower concentrator feed grades, scheduled plant maintenance, severe winter weather conditions, and a temporary safety suspension following a fatal incident at the site.

The setup from here

From a technical perspective, the picture for BHP has shifted bearish in the short-to-medium term, with the break below the 200-day SMA a significant line that bulls will want to reclaim as soon as possible. The immediate task for bulls is to defend the A$55.00 to A$56.00 support zone, which has historical significance and could attract buyers given the proximity of the RSI to oversold territory.

BHP enters the coming week in technically fragile territory, carrying the weight of a commodity market correction, a production miss at its most important copper asset, and a chart structure that has deteriorated sharply. With CBA having moved in the opposite direction over recent weeks, the gap at the top of the ASX market cap leaderboard has narrowed considerably. The YTD gain of 20% provides a dose of comfort for holders, as the rotation into defensives gathers pace into a new week.

Bull Case: