TransAlta Corporation (TAC Quick QuoteTAC - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, TAC's 50-day simple moving average crossed above its 200-day simple moving average, 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.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

TAC has rallied 13.8% over the past four weeks, and the company is a #2 (Buy) on the Zacks Rank at the moment. This combination indicates TAC could be poised for a breakout.

The bullish case only gets stronger once investors take into account TAC'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 TAC on their watchlist given the ultra-important technical indicator and positive move in earnings estimates.