Long Position on NILE @ $39.37 on 12/19/2012 (Rumor)

Blue Nile (NILE) operates as an online retailer of diamonds and fine jewelry worldwide. Its fine jewelry selection includes diamond, gemstone, platinum, gold, pearl and sterling silver jewelry, and accessories, as well as wedding bands, earrings, necklaces, pendants, bracelets, and watches.

Blue Nile, Inc. sells its products through the Web sites bluenile.com, bluenile.ca, and bluenile.co.uk.

The Company’s merchandise consists of diamonds and fine jewelry, with a particular focus on engagement diamonds and settings. It purchases polished diamonds from suppliers. The Company enters into multi-year agreements with diamond suppliers that provide for certain diamonds to be offered exclusively online to consumers through the Blue Nile websites.

As of January 1, 2012, the Company offers approximately 90,000 independently certified diamonds. The Company offers diamonds with specified characteristics in the areas of shape, cut, color, clarity, and carat weight.

Shares have formed a bullish "cup and handle" and higher prices are expected for this stock.

We are now hearing rumors of good news for this company. One of the rumors states that this stock will be named by the leading stock advisory service as one of its "top picks." This service is widely followed by mutual funds and institutional money managers. These investors have portfolios that mimic recommendations of this service. Their naming of the stock should lead to additional demand for the shares.

52-Week Trading Range:  $22.94 - $44.99

Entry Point:  $39.37

Stop Loss:  $37.50

Target Price:  $43.40

Position closed on 1/9/2013 at price of $37.35 with a -5.13% loss in 21 days.

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