CarGurus, Inc. (CARG Quick QuoteCARG - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, CARG's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."

There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.

There are three stages to a golden cross. First, there must be a downtrend in a stock's price that eventually bottoms out. Then, the stock's shorter moving average crosses over its longer moving average, triggering a positive trend reversal. The third stage is when a stock continues the upward momentum to higher prices.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

Shares of CARG have been moving higher over the past four weeks, up 7.9%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that CARG could be poised for a breakout.

Once investors consider CARG's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 5 revisions higher, and the Zacks Consensus Estimate has increased as well.

Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on CARG for more gains in the near future.