From a technical perspective, Sequans Communications S.A. (SQNS Quick QuoteSQNS - Free Report) is looking like an interesting pick, as it just reached a key level of support. SQNS's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world.

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 contrasts with a death cross, another widely-followed chart pattern that suggests bearish momentum could be on the horizon.

Over the past four weeks, SQNS has gained 13%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

Once investors consider SQNS'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 should think about putting SQNS on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.