Cohen just raised his stake in Blue Nile by 104.53% after he purchased a total of 342,114 shares of the stock at an average price of $37.50 a share. Cohen now holds 669,414 shares of Blue Nile.

>>4 Stocks to Profit From the Bounce

This company recently reported second-quarter earnings, and its net income jumped 40% on improved revenue. Blue Nile earned $2.2 million or 17 cents per share during the quarter, which is up from $1.6 million, or 11 cents per share, from last year. Revenue increased to $108 million from $91 million on improved sales in both its domestic and international business. For the full year, the company said it expects to earn between 75 and 85 cents per share on revenue between $440 million and $470 million. Wall Street analysts were anticipating earnings of 82 cents per share for the year on revenue of $454.8 million.

From a technical perspective, NILE has been basing and trending sideways for the last two months, with shares moving between $40.44 on the upside and $35.55 on the downside. Shares of NILE have just started to bounce higher right above its 200-day moving average of $35.77 a share, and it's flirting with its 50-day moving average of $38.12 a share. That move is quickly pushing shares of NILE within range of triggering a big breakout trade. That trade will hit if NILE manages to take out some near-term overhead resistance levels at $40.20 to $40.44 a share and then once it clears its 52-week high at $43.54 a share with high volume.

If that breakout triggers soon, then NILE could easily setup for a monster short squeeze. This stock has traded as high as $60 a share, which was a level last seen for NILE back in 2011. I would add to any long position in NILE if it takes out $50 since that's the last major resistance level from 2011 between the stock and tagging $60 a share.

Another billionaire making a big move into a heavily shorted stock is George Soros, the chairman of Soros Fund Management, the $24 billion firm that manages his personal fortune as well as the money belonging to his foundations.

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