Allogene Therapeutics, Inc. (ALLO Quick QuoteALLO - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, ALLO'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.

A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.

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

Shares of ALLO have been moving higher over the past four weeks, up 31.9%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that ALLO could be poised for a breakout.

Once investors consider ALLO'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 1 revisions higher, and the Zacks Consensus Estimate has increased as well.

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