Blue Nile Plows Through Resistance

Shares of Blue Nile NILE are trading higher on the session by 5.17%, at $40.88. The stock has been range bound for the past three months, bouncing off of the $32.50 level and finding sellers around $39.00. Shares have made a massive breakout today, though. In one fell swoop, Blue Nile has confirmed several potentially bullish patterns, including: breakout above the 20-day and 50-day moving averages, 20/50-day moving average bullish cross, breakout above resistance (medium-term), and high volume breakout above resistance (short-term). Long story short, this has the possibility to turn into a multi-month rise higher. Medium-to-long term prices targets of $45.00, $48.50, and $50.00 are now in play. Note that Blue Nile has 28.06% short interest. Traders can play this by buying the $40/50 call spread for a net debit of $3.70-3.80. More advanced traders can consider trading shares short on an intraday basis against this position to lower the overall cost basis. Blue Nile, Inc. is an online retailer of diamonds and fine jewelry. It has three wholly owned subsidiaries: Blue Nile, LLC, Blue Nile Worldwide, Inc. and Blue Nile Jewellery, Ltd. LLC serves its customers in the United States, Canada and Asia-Pacific.