OFS Capital Corporation (OFS Quick QuoteOFS - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, OFS'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.

OFS could be on the verge of a breakout after moving 28.2% higher over the last four weeks. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank.

Once investors consider OFS'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 2 revisions higher, and the Zacks Consensus Estimate has increased as well.

Investors may want to watch OFS for more gains in the near future given the company's key technical level and positive earnings estimate revisions.