{"id":64965,"date":"2025-12-29T11:54:26","date_gmt":"2025-12-29T10:54:26","guid":{"rendered":"https:\/\/www.captrader.com\/?post_type=analyse&p=64965"},"modified":"2025-12-29T11:54:27","modified_gmt":"2025-12-29T10:54:27","slug":"breakout-in-the-dax-increasingly-likely","status":"publish","type":"analyse","link":"https:\/\/www.captrader.com\/en\/analyse\/ausbruch-im-dax-wird-immer-wahrscheinlicher\/","title":{"rendered":"DAX breakout increasingly likely"},"content":{"rendered":"

Dear traders, dear stock market friends.<\/p>\n\n\n\n

Germany's leading index, the DAX, has been trading in a range between around 23,100 and 24,500 points for eight months now. While no major jumps are to be expected between the years due to the low trading volume, the question remains as to when the DAX will finally manage to break out of its sideways trend.<\/p>\n\n\n\n

DAX with strong performance over the year<\/h2>\n\n\n\n

In the last 160 trading days, or since May 7, the DAX has performed just 5.3 %. The US equity markets performed significantly better in the same period: the S&P 500 rose by 22.7 % and the Dow Jones by 17.8 %.<\/p>\n\n\n\n

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Performance chart 160 trading days: DAX (red), S&P 500 (blue), Dow Jones (green)<\/figcaption><\/figure>\n\n\n\n

However, when looking at performance since the beginning of the year, the DAX has kept up well with the US markets and, with a gain of 21.6 %, is even ahead of the S&P 500 and Dow Jones.<\/p>\n\n\n\n

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Performance chart, since the beginning of the year: DAX (red), S&P 500 (blue), Dow Jones (green)<\/figcaption><\/figure>\n\n\n\n

The strong outperformance of the DAX on a YTD basis is mainly due to the rally in the first five months, when many international investors increasingly withdrew capital from the US markets, which benefited the equity markets of other countries.<\/p>\n\n\n\n

In recent months, the picture has normalized again and the US equity markets have almost made up for their shortfall.<\/p>\n\n\n\n

Volatility in the DAX at an all-time low<\/h2>\n\n\n\n

It is not unusual for the DAX to take a breather after such a strong rally as that between January and May (including the short-lived slump in April) and not continue to rise at the same pace. On the contrary: after such a strong rise, the market was overbought and a consolidation is a healthy development for the long-term trend.<\/p>\n\n\n\n

However, this consolidation phase has now lasted almost eight months. There is a basic rule on the stock market that says: high volatility is followed by low volatility, and low volatility is followed by high volatility. <\/p>\n\n\n\n

The longer the sideways trend continues, the more likely it is that a breakout under high volatility or a strong price movement will soon take place. One of the best and most popular indicators for analyzing this interplay of low and high volatility are the Bollinger Bands. These consist of a simple moving average of the last 20 days, as well as the two outer bands, which run two standard deviations above and below the moving average.<\/p>\n\n\n\n

A contraction of the bands is also referred to as a \u201csqueeze\u201d and signals a phase of low volatility. If the bands open again after a squeeze and the price also breaks above or below one of the bands, this often signals the start of another phase of increased volatility.<\/p>\n\n\n\n

In addition to the Bollinger Bands themselves, there are other indicators that are based on them:<\/p>\n\n\n\n