The DAX Index is advancing towards new highs, maintaining a bullish market stance. The decline from the November 21, 2025 low at 22,943 concluded wave (2), initiating a rally in wave (3) with evident impulsive Elliott Wave patterns.
Wave ((i)) peaked at 23,392.2, followed by wave ((ii)) at 23,139.27. The Index then rose to 23,883.98 in wave ((iii)), before wave ((iv)) found support at 23,433.48. Wave ((v)) propelled prices to 24,474.62, completing wave 1 of a larger pattern.
The Correction And Subsequent Rally
A zigzag correction in wave 2 ensued, with wave ((a)) ending at 24,173.28, wave ((b)) at 24,318.3, and wave ((c)) at 23,923.97. This correction concluded wave 2, setting the stage for further gains.
The Index continues upward in wave 3 of (3). The potential target lies between the 100% to 161.8% Fibonacci extension of wave 1, ranging from 25,450 to 26,403. As long as the 22,943.3 pivot holds, pullbacks should find support in typical corrective structures, allowing for continued upward momentum.
The DAX is showing clear signs of a strong bullish trend continuing into the new year. The corrective phase we saw end in late 2025, specifically with the bottom at 23,923, has now given way to a powerful upward impulse. We are in the early stages of a third wave, which is typically the strongest and most sustained part of a bull market cycle.
This technical outlook is supported by improving economic fundamentals. Recent data released for December 2025 showed German factory orders unexpectedly rising by 1.5%, while the latest ZEW Economic Sentiment survey jumped to an 11-month high, indicating growing investor confidence. This backdrop strengthens the case for a continued rally in German equities.
Strategic Trading Insights
For derivative traders, this suggests positioning for upside in the coming weeks. We believe buying March 2026 call options with strike prices around 24,500 offers a direct way to participate in the expected move toward the 25,450 target. Using bull call spreads could also be an effective strategy to reduce the upfront cost and define risk.
We anticipate that any market dips will be shallow and present buying opportunities. The key pivot level to watch from the November 2025 price action is 22,943; as long as the market stays above this point, our bullish view remains firmly intact. This structure is similar to the post-correction rally we observed in the second quarter of 2023, which also began with a sharp impulsive move higher.
Considering the market’s upward momentum, selling out-of-the-money put spreads with expirations in late February or March is another viable strategy. This approach allows us to collect premium while betting that the DAX will not see a significant decline below the recent lows. Implied volatility has settled since the end of last year, making these credit strategies attractive for generating income.
