State Bank of India has developed a bearish head-and-shoulders pattern on its 1-hour chart following a sustained uptrend, signaling a potential reversal in near-term momentum. The technical formation suggests possible downside pressure after the stock broke below key support levels.

Technical Pattern Analysis

The head-and-shoulders pattern represents a classic bearish reversal formation characterized by a higher central peak positioned between two lower peaks. This structure indicates a potential transition from bullish to bearish momentum upon neckline breach.

On Thursday, SBI established a lower-high formation across the head and shoulders before decisively breaking below the ₹1,002.00 neckline. This breach, coupled with marginally reduced buying volumes, confirms the emergence of bearish momentum in the near term.

Technical Indicator Confirmation

Multiple technical indicators support the bearish outlook for the stock:

RSI Analysis: The daily RSI shows persistent bearish momentum, dropping from 65 in the previous trading session to 60 on Thursday, confirming the continuation of the downtrend.

MACD Signals: The orange signal line crossed above the blue MACD line, with the histogram turning red, indicating bearish momentum development.

Moving Average Crossover: On the 1-hour timeframe, the 5-day moving average has crossed below the 9-day moving average, further confirming the bearish trend direction.

Volume Analysis: The Price Volume Indicator confirms the trend, supported by a sharp decline in trading volume during the breakdown.

Price Levels and Implications

The bearish head-and-shoulders breakdown signals potential for extended downside movement. The downside target is derived by measuring the vertical distance from the head's peak to the neckline, then projecting that distance downward from the breakdown point.

Upside resistance now looms at ₹1,002.00, while persistent trading below the breakdown zone reinforces bearish control. A decisive close below the neckline support, preferably with elevated volume, would help mitigate false breakout risks.

Company Performance Overview

Despite the recent technical weakness, SBI has delivered strong returns across longer timeframes. In the past month, the bank posted a 4.31% return amid an extended uptrend. Over the prior six months, the stock advanced 22.76%, while achieving a 29.37% gain across the last year.

About State Bank of India

State Bank of India, incorporated in 1955, operates as India's largest public sector bank with an extensive network spanning over 23,050 branches, 62,500 ATMs, and 78,933 BC outlets. The bank commands more than 22% of domestic deposits and dominates multiple segments including retail banking, SME financing, agriculture, and corporate lending in infrastructure and services sectors. SBI maintains global operations across 29 countries, with particular emphasis on trade finance and operations in GIFT City.

State Bank of India 's Economic Research Department has projected India's economy to grow at 7.5% in FY26, showing optimism beyond official estimates. This forecast comes with an upward bias and represents a marginally higher expectation compared to the National Statistics Office's recent projection.

GDP Growth Projections Comparison

The economic growth landscape for FY26 presents varying estimates from different institutions. The First Advance Estimates released by the National Statistics Office on Wednesday positioned GDP growth at 7.4% for 2025-26, marking a significant improvement from the previous fiscal's 6.5%. The Reserve Bank of India has set its projection at 7.3%, while SBI's research team believes the actual growth will reach 7.5%.

The SBI report emphasizes that historically, the difference between RBI and NSO estimates typically ranges between 20-30 basis points, making the 7.4% estimate quite expected and reasonable. The research department noted that the second advance estimates, incorporating additional data and revisions, are scheduled for release on February 27, 2026.

Key Economic Indicators

Beyond GDP growth, other crucial economic metrics paint a comprehensive picture of India's economic trajectory. The gross value added growth is estimated at 7.3%, while nominal GDP expansion is projected at 8.00%. These figures suggest robust economic fundamentals supporting the optimistic growth outlook.

The report acknowledges that all current numbers are expected to change with the base revision to 2022-23, indicating potential adjustments in future estimates.

Fiscal Deficit Analysis

The fiscal deficit situation presents a mixed outlook for FY26. As of November 2025, the fiscal deficit stood at ₹9.80 lakh crore, representing 62.30% of the budget estimate. The SBI report projects the final fiscal deficit to reach ₹15.85 lakh crore, slightly higher than the budgeted ₹15.69 lakh crore.

Despite expectations of lower tax revenue compared to budget targets, the report anticipates higher non-tax revenue will help balance overall government receipts. Additionally, total expenditure is expected to be lower than budgeted amounts, which should help contain the fiscal deficit impact.

Economic Outlook

The SBI research maintains an optimistic stance on India's economic performance, projecting growth with upward bias. The convergence of multiple institutional estimates around the 7.3-7.5% range suggests broad consensus on India's growth trajectory. With the fiscal deficit as a percentage of GDP likely to remain unchanged at 4.40% despite slightly higher absolute numbers, the economic fundamentals appear stable for sustained growth in FY26.