We can see from your screen shot that it has transparency, so no problem there.
Dave has shown you how to add the stroke, but I am wondering what you mean when you say 'Used the blending option.' ?
Layer Styles (what Dave demonstrated) are usually the best first choice. They are non destructive, and have a huge number of options and possible effects.
Oh the blending option is the 1st option of the menu when you right click on the layer. That also led me to the layer style dialog.