Riot Platforms ( RIOT ), Inc. shares are little changed on Thursday. But that may not be the case for long.

A moving average crossover strategy has just flashed a sell signal. This is why our team of technical analysts has made it our Stock of the Day.

Moving average crossover strategies are very popular on Wall Street. They are easy to understand and test — and are completely objective.

The red line on the chart is the 20-day simple moving average. It is the average closing price of the past 20 days.

The blue line on the chart is the 10-day simple moving average. It is the average closing price of the previous 10 days.

If the shorter-term average closing price is higher than a longer-term moving average closing price, there is a good chance the stock is trending higher. And if the shorter-term moving average is lower than the longer-term one, there is a good chance the stock is trending lower.

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In a moving average crossover strategy, a buy signal is generated when the short-term moving average line crosses above the longer-term average price line. Conversely, a sell signal is given when the short-term price moves below the longer-term average price.

As you can see on the chart, there was a buy signal for Riot in July. This was followed by a sell signal in early August. The result of this trade was about breakeven.

Then a buy signal was given in late September when the shares were trading around $7.40. As you can see on the chart, a sell signal was given when the stock was trading around the $12.20 level. This trade was highly profitable.

But the sell signal means there is a chance Riot is about to head lower.

It is easy to understand why moving average crossover strategies are popular. Most traders who guess will inevitably lose money.

The main advantage of this type of strategy is it is completely objective. It takes the guesswork out of trading and makes it easier to profit.

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