The BHP Group Ltd (ASX: BHP) share price is enjoying a healthy lift today, up 2.5% to $42.22 per share.
That will come as welcome news to shareholders of the S&P/ASX 200 Index (ASX: XJO) iron ore giant, who've watched the BHP share price decline 21% since mid-April.
And there could be more good news to come in the short-term, according to Jessica Amir, Australian market strategist at Saxo Markets.
Why does the BHP share price appear set for a lift?
Amir notes that the BHP share price has come under pressure since April "as China's lockdown has ground down industrial metals demand and prices in iron and copper".
However, she said that this week BHP shares could march higher for three reasons.
First, it's the end of the financial year in Australia, with the BHP share price well down year-on-year. For that reason, Amir said, "We may likely see fund managers top up BHP positions as it's the largest commodity stock in the world and the biggest stock on the ASX."
Next, Amir said, "The technical indicators suggest BHP shares could rally as it's in oversold territory."
What other tailwinds could lift the ASX 200 miner?
The third reason she said the BHP share price could continue to gain over the short-term is due to apparent success with China's battle to contain its COVID outbreaks:
Sentiment picked up in China after it declared victory over Shanghai's Covid outbreak. This resulted in the iron ore price jumping 3.7% yesterday, and the technical indicators suggest buying may continue in the short-term. Meanwhile, the copper price jumped for the first time in five days.
Over the medium term, Amir is more cautious on the outlook for the BHP share price, noting that, "The industrial metal commodity rally could be short lived, until we have consistent news from China that restrictions are easing."
BHP's financial year ends this week.
Looking ahead Amir said, "We await their operational review due 19 July, which will probably give a dimmer outlook on commodity demand. BHP's financial results are due 16 August."
