The market's rally is narrow, but large-cap tech still leads.

Fewer than a quarter of S&P 500 stocks are trading above their 50-day moving averages, the equal-weight index has been sliding, and the indexes are being carried by a handful of large-cap tech names rather than a broad advance. That is not a reason to abandon what is working. Large-cap tech is where the earnings, the cash, and the incremental demand are still concentrated. Apple and Amazon come to mind.

Apple is already proving it. The stock trades just 2% below its all-time high. Amazon is the other side of the same trade. AWS demand and the AI buildout, including a raised 2026 capital-spending plan, give it a clearer growth path than the rest of the market. The Magnificent 7 still look set to grow earnings roughly twice as fast as the other 493 names in the index. Breadth can stay poor. Until the profit growth migrates somewhere else, the money is still better off in the names that are actually producing it.

Let's examine the daily charts of each to see where they could head in the near term.

Apple, the second-largest company by market cap, is up 30% over the last year. Since the end of July, it has been trading in a range between the very round $300 mark and $345, following a 7% weekly loss in the last week of July, on the second-largest weekly trading volume in the last 14 months.

Relative performance against mega-cap tech has improved markedly, with the ratio chart versus the Roundhill Magnificent Seven ETF trending higher since May. Absolute price action began turning in mid-April following a breakout above a bearish descending triangle, which resolved into a double-bottom base. That setup was confirmed on July 2 with a jump above its $302.52 trigger, generating a 5% single-day advance.

While that initial breakout stalled after three weeks, price action quickly transitioned into a larger cup-with-handle pattern. The stock is currently coiling directly beneath its $345.44 pivot. The handle formation began with a doji on Sept. 22, echoing the base's initial launch points on July 28 and July 30, when twin dojis flanked a bearish shooting star just before the 7.3% gap-down on July 31.

With the handle now mature, the daily chart provides a defined tactical entry trigger. One can enter with a break above the cup-with-handle trigger, which could see the stock move toward $390, by early 2027, a roughly 16% gain from current prices. Remain bullish above $328.

Apple was trading around $338 Thursday.

Turning to Amazon, the stock has lagged the MAGS ETF over the past two months. This consolidation followed the stock's best single-day advance in over 11 years, when shares surged 15% on July 31 following its second-quarter earnings report. Earlier in the year, round-number support at $200 laid the foundation for a double-bottom, anchored by a bullish morning star on Feb. 17 and a bullish harami on March 30, before a 3.5% gap-up on April 8 completed a bullish island reversal.

Following a mid-September gap fill that retraced the late-July earnings jump, the stock is actively constructing a fresh cup base. Clearing the key $260 pivot would fully activate this multimonth continuation pattern.

With base construction nearing completion, the daily chart presents a compelling trade setup. A move above $260 puts that potential fully in motion. This stock could reach $320 by mid-2027, a 24% gain from current prices. Remain bullish above $250.

Amazon was trading around $254 Thursday.

Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.