This selection is to tight and close, where going to enlarge it a bit.
Go to Select=>Modify=>Expand.
New window comes up, I've set mine about 10pixels.
Now for some magic, do Shift+Ctrl+I to invert the selection and hit Delete.
Result should like this:
Next a quick step forward, this blade should be shiny to some extend.
For that we need a Alpha Channel.
We need to select our blade again, to easly get that, just Ctrl and left click on its Layer.
If you still got your selection just do Shift+Ctrl+I to invert it back.
Do Ctrl+C to copy it.
Go to the Channels palette and hit the NEW icon down below, next to the trashcan. Then do Ctrl+V to paste the blade in the channel.