DAX: Entering a Strong Impulsive Wave 3-A Bullish Catalyst for 2026

The DAX, Germany's premier equity index, has entered a critical phase of its Elliott Wave structure, with the completion of wave (2) on November 21, 2025, and the initiation of a powerful impulsive wave (3). This development, supported by Fibonacci projections and reinforcing economic fundamentals, positions the index for a significant upward trajectory in 2026. For investors and derivative traders, the confluence of technical and macroeconomic signals presents a compelling case for bullish positioning.

Technical Analysis: Wave 3 Unfolds with Precision

Elliott Wave theory identifies wave (3) as the most dynamic and extended phase of a five-wave impulsive structure. According to the Elliott Wave Forecast, the DAX completed wave (2) as a corrective zigzag, with wave ((c)) ending at 23,923.97, before resuming higher in wave (3) of (3). The unfolding of wave (3) has followed a textbook impulsive pattern: wave ((i)) concluded at 23,392.2, a pullback in wave ((ii)) found support at 23,139.27, and wave ((iii)) surged to 23,883.98. A corrective dip in wave ((iv)) stabilized at 23,433.48, setting the stage for the final leg, wave ((v)), which pushed the index to 24,474.62.

Fibonacci projections further validate the bullish case. The 100% to 161.8% extension of wave (1) targets 25,450 to 26,403, aligning with key resistance levels identified in technical analysis. As long as the pivot at 22,943.3 remains intact, pullbacks are expected to follow typical corrective structures, reinforcing the likelihood of continued gains.

Economic Fundamentals: A Resilient Foundation

While Germany's GDP contracted by 0.3% in Q2 2025, driven by weak investment and negative net exports, the DAX has defied macroeconomic headwinds. This resilience stems from robust corporate earnings and structural fiscal stimulus. Major industrial and technology firms, including SAP and Siemens, have delivered strong results, underpinning the index's 23% year-to-date gain in 2025.

Looking ahead, economic forecasts suggest a rebound in German GDP growth, with 1.2% expansion projected for 2026 and 2027. Fiscal investments of EUR 115 billion annually in infrastructure, climate projects, and defense are expected to catalyze long-term growth. Meanwhile, the European Central Bank's rate cuts have reduced borrowing costs and bolstered investor sentiment, creating a favorable environment for equity markets. These fundamentals reinforce the technical case for the DAX, ensuring that wave (3) is not merely a technical artifact but a reflection of underlying economic resilience.

Derivative Strategies: Capitalizing on Wave 3

For derivative traders, the ongoing wave (3) offers high-probability opportunities. Long call options and futures contracts are particularly attractive, given the index's strong momentum and Fibonacci targets. Futures provide leveraged exposure to the DAX's upward trajectory, while call options offer asymmetric risk-reward profiles, especially near key resistance levels such as 24,600 and 25,000.

The "Blue Box" approach, a technical tool used to identify convergence zones of buyers and sellers, further enhances entry precision. Traders should also monitor support levels at 23,000 and 23,500, which could serve as critical re-entry points if the index experiences a temporary correction. Given the projected 25,450–26,403 target, a disciplined strategy of scaling into positions during pullbacks within wave (3) could maximize returns while managing risk.

Conclusion: A Convergence of Forces

The DAX's transition into wave (3) is not an isolated technical event but a synchronized alignment of market structure, Fibonacci mathematics, and macroeconomic dynamics. With wave (2) complete and wave (3) in full force, the index is poised to test-and potentially exceed-its 2025 highs. For investors, this represents a rare opportunity to align with a powerful trend, supported by both chart patterns and real-world economic progress. As the ECB's accommodative policies and Germany's fiscal reforms take hold, the DAX's journey toward 25,450–26,403 is not merely a technical projection but a narrative of renewal and growth.