One under-$10 name in the airline complex that's setting up to trend higher is SkyWest ( SKYW), which, through its subsidiaries, operates a regional airline in the U.S. It also provides ground handling services for other airlines throughout its system. This stock is off to a bearish start in 2012, with shares down by over 40%.

If you take a look at the chart for SkyWest, you'll see that the bears have done a number on this stock during the last six months, with shares plunging from over $13 a share to a recent low of $6.25 a share. During that massive move lower, shares of SkyWest have consistently made lower highs and lower lows, which is bearish technical price action. That said, SKYW has now started to trend sideways for the past month between $6.25 to $7.10 a share. In fact, SKYW has started to show a double bottom pattern at around $6.25 to $6.34 a share, and the stock looks posed to trigger a near-term breakout trade.

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Traders should now look for long-biased trades in SKYW if it can manage to trigger a break out above some near-term overhead resistance at $7.10 a share with high-volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 497,329 shares. If we get that action soon, then SKYW will have a great chance of re-test and possibly taking out its 50-day moving average of $7.45 a share, and some overhead resistance at $7.57 a share. If SKY were to take out those levels with strong volume, then this stock could easily skyrocket toward $8.50 to $9.50 a share, or possibly much higher.

If you're bullish on SKYW, then one could buy off weakness and simply use a stop right below that double bottom zone at $6.34 to $6.25 a share. If you buy off weakness, then I would add to any long positions once SKYW takes out $7.10 and then $7.57 a share with high-volume. One could also just off strength once $7.10 is taken out with volume, and simply use a stop a few percentage points below that level.

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