After reaching an important support level, Lifeway Foods, Inc. (LWAY Quick QuoteLWAY - Free Report) could be a good stock pick from a technical perspective. LWAY recently experienced a "golden cross" event, which saw its 50-day simple moving average breaking out above its 200-day simple moving average.

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.

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

Over the past four weeks, LWAY has gained 19.5%. The company currently sits at a #1 (Strong Buy) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

The bullish case solidifies once investors consider LWAY's positive earnings outlook. For the current quarter, no earnings estimate has been cut compared to 1 revisions higher in the past 60 days. The Zacks Consensus Estimate has increased too.

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