DAX Resumes Bullish Momentum: A Strategic Entry Point for 2026?

The DAX index, a bellwether for European equity markets, has rekindled its bullish momentum in late 2025, sparking renewed interest among investors eyeing 2026 opportunities. A confluence of Elliott Wave patterns, technical confirmations, and improving economic fundamentals suggests the index is poised for a significant breakout. However, as with any high-conviction trade, understanding the structural underpinnings and potential risks is critical for strategic entry.

Elliott Wave Structure: A Blueprint for 2026

Elliott Wave analysis reveals a compelling narrative for the DAX. The index has completed a five-wave impulsive structure (waves ((i)) to ((v))) within wave (3) of a larger bullish sequence. Wave ((i)) concluded at 23,392.2, followed by a corrective wave ((ii)) to 23,139.27. A robust wave ((iii)) pushed the DAX to 23,883.98, with wave ((iv)) finding support at 23,433.48 before a final impulsive leg ((v)) carried the index to 24,474.62, completing wave 1 of a higher-degree pattern.

After a zigzag correction in wave 2 (ending at 23,923.97), the DAX has resumed higher in wave 3 of (3), a phase historically associated with strong momentum. Fibonacci extensions project key upside targets at 25,450 to 26,403, representing 100% to 161.8% of wave 1's gains. This structure implies that as long as the critical pivot level at 22,943.3 holds, the index is likely to continue its upward trajectory, with pullbacks finding support within typical corrective ranges.

Technical Confirmations: Momentum and Resistance

Technical indicators further validate the bullish case. The 1D RSI has entered overbought territory (above 70.00), while the alignment of the 1D MA200 and 1W MA50 trend lines reinforces the uptrend. However, traders remain cautious about a potential three-drives pattern, which could trigger a sharp decline if the yellow CIB line is breached.

On shorter timeframes, the DAX is consolidating near the 23,400 support zone. A bullish rebound here would confirm ongoing momentum, with targets at 23,950 and beyond. Conversely, a confirmed break and daily close below 23,400 would signal deeper downside risk toward 23,250 and 23,094. These levels underscore the importance of disciplined risk management for 2026 entries.

Economic Fundamentals: A Tailwind for 2026

Beyond technicals, macroeconomic conditions are aligning to support the DAX's ascent. German factory orders have surprised to the upside, while the ZEW Economic Sentiment survey reflects an upward revision in investor confidence. On a broader scale, 2026 GDP growth is projected at 2%, with inflation stabilizing near the 2% target.

Global equity markets are also set to benefit from a dovish shift in U.S. monetary policy. The Federal Reserve's implied three rate cuts in 2026, coupled with Goldman Sachs' forecast of 2.8% global growth, create a favorable backdrop for risk-on assets. Reduced tariff pressures and tax cuts in the U.S. are expected to amplify this effect, indirectly bolstering European equities like the DAX.

Strategic Entry Points and Risks

For investors considering a 2026 entry, the current wave structure offers a compelling case. Wave 3 of (3) is typically the strongest leg in Elliott Wave theory, suggesting the DAX could accelerate toward the 25,450–26,403 range. A strategic entry could be initiated near the 23,400 support zone, with a stop-loss below 23,250 to mitigate downside risk.

However, the market's vulnerability lies in its reliance on the 22,943.3 pivot. A breakdown here would invalidate the bullish case and trigger a retest of earlier lows. Additionally, while the overbought RSI suggests caution, it does not negate the broader uptrend-provided the index remains above key support levels.

Conclusion

The DAX's resumption of bullish momentum in late 2025, supported by a robust Elliott Wave structure and improving fundamentals, presents a strategic entry opportunity for 2026. While technical and macroeconomic factors align to favor the upside, traders must remain vigilant about short-term volatility and the integrity of critical support levels. For those willing to navigate the risks, the path to 25,450 and beyond appears increasingly plausible.