After reaching an important support level, Essent Group Ltd. (ESNT Quick QuoteESNT - Free Report) could be a good stock pick from a technical perspective. ESNT recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.

A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being the 50-day and the 200-day, 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.

This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.

ESNT has rallied 12.3% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates ESNT could be poised for a breakout.

The bullish case only gets stronger once investors take into account ESNT's positive earnings outlook for the current quarter. There have been 1 upwards revisions compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Investors should think about putting ESNT on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.