The DAX Index is moving up towards new highs, showing a strong bullish market trend. The drop from the low on November 21, 2025, at 22,943 marked the end of wave (2), leading to a rally in wave (3) with clear Elliott Wave patterns. Wave ((i)) reached its peak at 23,392.2, then wave ((ii)) dropped to 23,139.27. The Index climbed to 23,883.98 in wave ((iii)), with wave ((iv)) finding support at 23,433.48. Finally, wave ((v)) pushed prices up to 24,474.62, completing wave 1 of a larger pattern.

The Correction And Subsequent Rally

A zigzag correction took place in wave 2, where wave ((a)) ended at 24,173.28, wave ((b)) at 24,318.3, and wave ((c)) at 23,923.97. This correction completed wave 2, opening the door for more gains. The Index is continuing its rise in wave 3 of (3). The target for this move is between 25,450 and 26,403, based on the 100% to 161.8% Fibonacci extension of wave 1. As long as the pivot at 22,943.3 holds, any pullbacks should find support in normal corrective patterns, allowing for continued upward momentum. The DAX shows clear signs of a strong bullish trend as we enter the new year. The correction that ended late in 2025, especially at the low of 23,923, has led to a powerful upward surge. We are in the early stages of the third wave, which is usually the strongest part of a bull market cycle. This positive outlook is backed by improving economic indicators. December 2025 data revealed a surprise 1.5% rise in German factory orders, while the latest ZEW Economic Sentiment survey reached an 11-month high, reflecting increasing investor confidence. This environment boosts the likelihood of continued gains in German stocks.

Strategic Trading Insights

For derivative traders, this is a signal to prepare for upward movement in the weeks ahead. We recommend buying March 2026 call options with strike prices around 24,500—this directly positions you for the expected rise toward the 25,450 target. Consider using bull call spreads as a way to lower upfront costs and manage risk. We expect any market dips to be minor, presenting good buying opportunities. Keep an eye on the pivotal level at 22,943 from November 2025; staying above this point means our bullish outlook is secure. This structure is similar to the rally we observed after the correction in the second quarter of 2023, which also started with a sharp move upwards. Given the market’s upward trend, selling out-of-the-money put spreads that expire in late February or March is another solid strategy. This allows us to collect premium while betting that the DAX will not significantly drop below recent lows. Implied volatility has decreased since the end of last year, making these credit strategies appealing for income generation. Create your live VT Markets account and start trading now.

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