If you believe in Blue Nile, then the recent downgrade by Citigroup can be interpreted as pure bull kaka. The small float and the negative calls have sent the stock plummeting from a high of 105 all the way down to today's 81.84. Couple the poor forecasts and insider selling by the Co's top dawgs, and it would seem reasonable that NILE deserves the 20% drop. But the Co hasn't warned about declining revenue or earnings. Could it be that sensational growth has suddenly gone flat? Where's the proof? Have Zales and Tiffany's entered the online jewelry wars? I can see the possibility of slowing growth, but not much else. So I'm holding my shares, which I bought at 80.
Pupule says: If you really, really, really like Blue Nile, this is a screaming buy. A stock that drops below its 10-day SMA (94) and 50-day SMA (88) is rare in this environment. That is, a stock I've rated A-. Me? Wrong? We'll see.
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