Blue Nile Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online jewelry store Blue Nile (Nasdaq: NILE  ) traded more than 10% above Thursday's closing price today on moderately high volume.

So what: There is no obvious explanation for Blue Nile's move today. However, this move picks up a nearly week-long rally that had derailed a bit yesterday on what looked like profit-taking action.

Now what: Rivals in the luxury industry are not joining Blue Nile's surge, so this is neither a sector effect nor a reaction to consumer news. It's easy to point a finger at the ridiculous short position in this stock and scream "Squeeze!" but that condition has been around for ages. The slow rise over the past month or so hardly qualifies as a triggering event for a real short squeeze.

Interested in more info on Blue Nile? Add it to your watchlist.

Fool contributor Anders Bylund doesn't hold a position in any of the companies discussed here. Blue Nile is a longtime Motley Fool Rule Breakers pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 03, 2010, at 3:37 PM, teachersam wrote:

    Why write this article if you have "nothing" to say?

  • Report this Comment On December 03, 2010, at 4:02 PM, TMFZahrim wrote:

    @SorrySam, the article begins like this:

    "we do like to keep an eye on big changes -- just in case they're material to our investing thesis."

    In this case, there's nothing material going on, so that's what I report. As for your elegant sentiment, you should get together with TheMainMillerMan and settle your differences:

    "I'm so tired of the [golf word] analysts posting negative stories about RIM. RIM was upgraded, so leave it at that."

    (from )


  • Report this Comment On December 03, 2010, at 5:31 PM, PositiveMojo wrote:

    The fact that there is no discernable reason for a significant variance is an important observation. But a bit more of a breakdown might be helpful. Was the based on high volume or low? Did it occur over a short period of time based on a few transactions or did it run up over the course of the day over many transactions.

    One result indicates hedge funds or money players are driving up the price. The other indicates there has been an overall increase in market demand. These are pretty significant indicators that can be easily analyzed. If someone is playing with demand the recommendation should be to steer clear lest you get your head taken off.

    SorrySam may have been looking for a bit more of an analysis and your opinion is valued. In fact, I'd like to know what you think happened.

  • Report this Comment On December 03, 2010, at 8:45 PM, TMFZahrim wrote:

    Fair enough, @PositiveMojo. I already noted that volume was fairly high -- a little over twice a normal day, all told. Both volume and price gains were spread like butter across the day, with just a couple of volume spikes that didn't coincide with pricing spikes. So I'm sticking with my theory about a continued general rally rather than a few large trades.

    Fool on,


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10/26/2016 11:15 AM
NILE $35.41 Up +0.21 +0.60%
Blue Nile CAPS Rating: **