COMPASS Pathways PLC Sponsored ADR (CMPS Quick QuoteCMPS - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CMPS's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."

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.

CMPS could be on the verge of a breakout after moving 17.5% higher over the last four weeks. Plus, the company is currently a #3 (Hold) on the Zacks Rank.

The bullish case solidifies once investors consider CMPS's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 3 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on CMPS for more gains in the near future.