MercadoLibre, Inc. (MELI Quick QuoteMELI - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, MELI'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.

Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb 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.

MELI could be on the verge of a breakout after moving 15.1% higher over the last four weeks. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank.

The bullish case only gets stronger once investors take into account MELI's positive earnings outlook for the current quarter. There have been 4 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

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