All posts by Tate Dwinnell

Mail Bag

Discussion of Changes to Breakout Tracker

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Question:

Thank you so much for your long memo regarding the upcoming (and recent) changes. I am glad you have decided to go weekly on the update. I was becoming concerned with the obviously enormous amount of work you had to do each day, wondering how it was humanly possible to keep it up. So, I welcome the change. Besides, there are many places to go to get detailed daily updates.

I had not noticed the column change from breakout rank to 50% DMA. I guess that corroborates your view of its relative importance. I welcome the change. I think another value with this new column is the IBD notion that a sell signal flag is raised when the price gets too extended by becoming more than 51% above its 50 dma. It is not easy to get this visual information from Metastock, so you are providing a valuable service on this little-used signal.

Your description of the new look and function of Breakout Tracker sounds great. I can hardly wait. When you have the time, I will be very interested in finding out how you will be calculating the new sixty-point ranking system.

Finally, one last question. Are the numbers in the Breakout Tracker calculated each day? I’m thinking of the pivot point which sometimes tends to meander a bit.

Best of luck on your update. There are many of us who will be thankful.

My Response:

You make a good point about the additional use of the 50DMA info – I had forgot to mention that, nice work.  Let me give you a quick rundown of the new ranking system (in fact now that I think about it I will send all members a look at how the rank is determined sooner, rather than later):
 
TECHNICAL: based on 30 points
  • 10 points (Relative Strength):  eg. RS of 78 recieves score of 8
  • 10 points (Shape): score base on volatility of day to day action as well as overall shape (eg. wild intraday price swings with a V like base will receive a much lower score than a long flat base with tight intraday action)
  • 10 points (Buy Vs. Sell Volume): i look at a daily and weekly chart to determine buy vs. sell volume – the more buy volume the higher the score
FUNDAMENTAL: based on 30 points
  • 15 points (Earnings/Sales Growth): I look at consistency, history, amount of growth, acceleration and future growth estimates (future growth is very important something I noticed IBD wasn’t factoring in to their ranking system). I give it more weight in my system.
  • 10 points (Profit Margins/ROE): I look at relation to industry average and if it’s rising or declining.  (ie. if both margins & ROE are well above the industry average and have been rising the last couple years, the stock will recieve a score of 10)
  • 5 points (Management Ownership/Institutional Positions):  If management owns a large portion (say 20% or more) and institutions are initiating many new positions, the stock receives a score of 5.
The risk number that is included in the Tracker is just a measure of volatility.  I personally don’t use it and don’t think it’s all that valuable, but if you find it valuable  I will probably leave it be.  To come up with a true risk reward ration requires a lot of work and takes into account many factors (support areas, RS, trend lines, sector, future growth, etc.) It is very difficult to come up with an exact numer for something like this.  When I look to enter a position I look at where the buy point is from the nearest major support area (another good use of the new %50DMA column)  – this gives me a good idea as to my potential risk (assuming I will hold and allow it to test that support).  My risk is the % I could lose if the stock drops below support.  Assuming that high ranked stocks will offer the greatest potential rewards, which I think is fairly safe to assume, you can get a decent picture of risk vs. reward.  For example, take a stock like HURC which I mentioned last night.  Here is a stock that is highly ranked (53).  I see that it has been skating along major support of the 50DMA (indicating very strong support there) for the last couple days.  To me, this is an extremely high reward vs. risk stock because if the stock drops below the moving average (which it appears unlikely to do) i’m out with a very small loss.  As it turns out, the stock bounced for a 12% gain today.  Now that’s what I call a nice reward!  As you can see it would be very difficult to determine this on a day to day basis, but combining the ranking system with the %50DMA column and a quick analysis of the chart, you can start spotting some real nice opportunities.
 
You asked about updating the info.  Unfortunately, usually the pivot points aren’t repositioned. Although I have at times gone in and changed a pivot when it was clear that wasn’t quite the best buy point.  IF you could give me an example I would be happy to discuss it.  Also, please dont’ hesitate to notify me if you think the pivot is wrong or there are other errors.  This database is maintained by me and yes I do have bad days and make errors.  If I can get members to notify me of problems, it would be a big help. 
 
Hope this helps .. and hope you’re making some money! 

Mail Bag

Do You Provide Clear Buy and Sell Signals?

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Question:

I joined a new  IBD group that met for the first time last month in the
Chicago area. The group  is interested in learning how to successfully
invest using CANSLIM. Just to keep things simple do you provide clear buy
and sell signals for the stocks that you recommend.

 I’m a little skeptical that anyone’s recieved a 100% return in the current
market. Do you provide proof that your portifolio made 100% this year?

My Response:

Thanks for your inquiry.  To simply answer your first question.. yes, I do
provide clear buy and sell signals to my members in a few different forms.
One way I do this is through a Weekly Stock Watch which is sent to members
every Sunday evening and takes a look at the best opportunities for the week
ahead.  Each stock is accompanied by analysis of the chart and buy and sell
strategies.  As you know, I also run a model portfolio so that members can
see a "real world" portfolio in action.  For each stock I provide
trading notes throughout the holding period at critical points (such as
break above resistance or below support, etc.)  When a position is purchased
or sold, the member is notified within a couple minutes time (usually as
fast as I can get an explanation written and sent out).  Of course, I
recommend that members do their own research before blindly purchasing these
picks.

You asked about performance.  That 100% performance is an annualized return
(actually, I need to update that.. it’s currently 95%).  That includes a
string of big winners that were recommended when I was working as an analyst
for CANSLIM.net near the end of 2003 (these picks included RIMM, AUO, COH).
As you know, it has been a difficult market in the past year for growth
investors.  Year to date, the SelfInvestors.com Portfolio is up 8.3%,
compared to a 6.6% year to date return when you average the major indices.

I’d like to discuss a bit too my investing strategy which is aligned with
the ultimate goal of many of the most successful investing strategies. 
It’s as simple as keeping losses small while letting your winners run. 
It’s not about how many winning trades you have, it’s the size of your
gains vs. losses.  For example, over the last couple months my winning
percentage has been less than 50%.  Buy by keeping losses small
(losing trades have averaged 5% loss) they can be easily recovered from. 
In fact, one pick (Jupiter Media – up 43% has more than covered these
losses).  That is the key to this strategy… you are basically searching for
the big winner and the good news is that you don’t need to be right very
often if you practice sound money management.

I have talked quite a bit about the portfolio, but the real gem of the
service is the Breakout Tracker, which I think you’ll find incredibly
useful.  No other site offers a service like this.  Imagine having a list of
every potential breakout ranked according to fundamental and technical
analyis which can be sorted by industry group, relative strength, % change
from average volume (similar to IBD’s Where Is the Big Money Flowing), etc. 
A quick and highly effective strategy that I encourage members to use is
focusing on industry groups that are leading the market and create a watchlist
of the highest rated stocks in those groups that are near a breakout.  Set alerts
for your pivot points and be prepared to make the purchase!  The Breakout
Tracker allows you to do this in just a few minutes each evening.

I would encourage you to sign up for the free report which begins the
process of implementing a successful high growth strategy.  It discusses the
health of the market and pinpoints sector and industry group strength.  As I
do with all members I would be happy to discuss investing and/or my services
in greater detail if you’d like.  I’ll remind you that I aslo offer a free
premium trial, which I will be increasing to 30 days very soon (it’s
currently 10 days, which I don’t think gives the potential member a good
idea of what the service offers).  Anyway, I hope I’ve answered your
questions here and sincerely look forward to working with you in the future.

Mail Bag

More Notes On Buying And Selling Strategy

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Question:

I want to ask you a question and advice on something.  I read your notes on
GIVN and feel the same way about HANS today.  What happened to that thing
today???  I caught it right above it’s pivot point this morning and watched
it go over 30 and thought this will be a good one!
Next thing I know I am stopped out 7% down in a flash. I have to leave to go
to my part time job at 2:15 PM EST.  When I got back home, I saw where it
really took a beating.  Thank goodness for stop loss orders.

Here’s what I learned from this one and I want your advice on how you would
have handled it.
I read somewhere that if you enter a trade, it should go up from the start
to some degree.  In other words, it should be a good trade from the start.
Now, it might wiggle a little after it moves up in a slight pullback but
should not tank before the end of the day.  I usually watch a new trade for
some time after I buy to see how it reacts.  I always immediately enter a
stop loss in case the computer or market crashes.  It is usually at some
support level around 7% to 8% below the buy price.  But today I learned to
put a shorter stop loss in on the first day especially since I can not be
here all day on the trade day.  If it survives the first day with a
reasonable gain, then the next day I will move it lower.  At least that’s
how I think it would work in this type of market.  In a bull market, maybe
the 7% stop would be best.

Finally, my question.  How do you handle a new buy the first day in this
type of market?  Where would be the best place to put a stop loss on initial
buy?  I know you can’t advise what to buy and stuff, but let me know what
you might do in these circumstances.  And another question.  Bill says to
let the winners run to about 20% from the pivot point before it bases again
and think about taking some profits while they are going up.  With this
market, many are not getting anywhere near even 15% before they fizzle. Two
stocks I am holding now have over 10% gain and I don’t want to lose it.
I’ll tell you what they are. JUPM is up 12.77 % and OS is up 11.51%.   How
close do you think Bill would put a stop loss under these?  There’s no
telling what could happen in this market we are in and I just thought I
would ask.

My Response:

Let’s tackle your HANS purchase first… did you get a chance to read the report for this stock?  In it I said "  This is a stock that is showing heavy accumulation by institutions and appears to have room to run.  However, I would be hesitant to purchase at the formal pivot of 29.18 due to the fact that it sits far above the first line of major support.  Any significant shake out in the stock will force you out of the position.  In a perfect world the stock will continue its decline to around 25 on lower selling volume, offering a better purchase point.  Does this mean you should avoid the stock completely should it surge from here above the all time high?  No.  Give yourself a chance at success, but be vigilant about keeping your losses small.  This would mean selling the position should it drop below the pivot point on increasing sell volume. "
 
This an excellent company that should continue to do well, but keep in mind that just because it’s a great company and it surpasses a pivot point does not mean it’s a great buy.  In that report I suggested taking a look at the distance from the first line of major support and the pivot point.  Clearly, this is a stock that has run up quickly in the last couple of weeks, was far extended from support and needed to consolidate gains.  This is one of those breakouts that had a high probability of coming back to the pivot or worse, dropping more than 8% below the formal pivot.  (Now it could also be argued that the pivot is 25.29 – technically it is more than 1/2 up the base.  I didn’t list this point as the pivot because I felt that after the run up it had it needed to spend more time consolidating and that a proper pivot would be higher in the base – in the future I will leave personal opinion out of it and stick to the technical rules for finding pivot points). 
 
Now, that being said, I don’t think it’s a mistake to take a chance on a breakout of a stock like this.  Stocks have certainly shot to the moon without a meaningful consolidation in the past and will happen again, but not very often.  However, this is not a stock that I would have purchased, set a 7% stop and walked away from.  It’s one that I would want to monitor (i’ve attached an intra day chart to give you some thoughts on how I would have played this during the day). 
 
OK some tips on making the purchase:
  • Purchasing in the first half hour of trading is rarely a good idea… this is the time that amateurs do most of their trading and the true direction of the stock has not been revealed.  Looking at that chart of HANS, the stock gapped up immediately at the open, consolidated and then plummeted below support of the bottom of the gap within a couple of hours on heavy volume.  It would have been best to watch a 5 or 10 min chart and waited until it cleared the consolidation on heavy buy volume… which it never did and the purchase would not have been made.
  • Make sure volume is surging: Divide the 50 day average volume by 6.5 hours (hours in a trading day) and then multiply by where you are in the trading day (this is done automatically in the Breakout Tracker, but delayed 15 minutes.)  When monitoring a breakout you will want to know if volume is surging in real time.  Of course you could see this on a 5 minute chart as well.  Helps to have one monitor for your 5 minute charts and one for executing trades.
When To Sell (may like to have look at the tutorial section on selling as well)
  • Typically, you’ll want to lock in a profit at 20-25% if the stock doesn’t increase by this amount in less than 2-3 weeks.  Stocks that jump 20% in a short time frame (JUPM has this potential and possibly OS) should be given a chance to run.   Of course if the market turns negative, these rules will be modified and positions will be closed much sooner or held longer depending on conditions.  Currently, the market is strong and positions should be given a chance to ride out.. especially positions like JUPM.  I don’t believe in hard and fast rules for selling though.  It really depends on the overall market, price, volume and where support levels
Mail Bag

New Breakout Tracker Is Stunning! Some Suggestions….

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Question:

You new breakout web page is stunning. I like the design and the idea of multiple pages which gets rid of the clutter. With that said, I have two questions:
  • With so many pages of stocks is there any way to "find" a specific stock, i.e., if I use the Find Command (Ctrl-F) on page 1 will it wander through all the pages to find it for me? As opposed to paging through all the pages manually.
  • Hiding the comments section is a nice touch. However, I copy and paste these great comments into a stock tracking software (Checklist Investor) so that all the relevant informational pieces from various sources are in one place for a specific stock. Is there any way to copy these comments? I tried right clicking on the comments logo but that didn’t have any options that copied the info.

My Response:

I’m glad you like the new breakout tracker.. I am very pleased with the way it turned out.   I hadn’t thought of what you are suggesting and glad that you did – i’m always interested in the ways that members use the service.  The most exciting part of the new tracker is the multitude of ways analyze the data.. ie. performance of stocks w/ specific ranking, avg buy volume for industries as a whole, the % of the time these breakouts reach a 20% gain vs. the % of time they hit an 8% loss, etc.  This is where the service is headed.  The overall vision is to create analytics page with all kinds of this informative info… in order to hone in on the absolute best strategy for profiting from the market.
 
Regarding your specific suggestions I will discuss them with my programmer in the coming days.  These should be fairly easy to implement.  The notes are kept in a database and it should be fairly easy to pull them out into a .CSV Excel.  What I could do is make the entire watchlist available for download as an Excel file so members can use the data in any they want to. 
[update: these features have been implemented]

Mail Bag

Finding Opportunities, Executing the Trade (in a nutshell)

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Question:

Probably the most difficult thing I have found about investing is catching
the breakouts as they are happening.  Here’s what I would find hellpful:

1.  I would like to get a glimpse into your trading room and see what it is
you are watching & doing to catch breakouts. Is there some way you could
write an article telling us in simple language — here’s how I start my day,
here’s what I watch thoughout the day, here’s what’s on my computer screen
thoughout the day,  here’s the thought process I’m going through once I spot
a possible breakout and here’s when I pull the trigger.   Maybe write an
article about a typical trading where you talk us through your day.

Its seems that there are 3 things you have to watch throughout the day to
catch a breakout as it is happening: 1) price as it approaches the pivot
point 2) A chart showing daily volume (not sure if daily or intraday, say 5
minute would be best) and 3) Volume % increase.  Are these 3 things
primarily what you are watching?  What is it you have on your screen?

I’ve thought it out and it seems like I need a 2 monitor setup to do this: 1
monitor with real time quotes on the hottest of the hot stocks plus charts
on stocks that look like the price is approaching the pivot point that day
and a second monitor where you could watch volume % increase on those
stocks.  This of course is now going to be available at SelfInvestors.com. 
By watching the price, the chart & the volume –you should be able to catch
the breakout.  Is this how you do it?  If not –how.  Could you please write
an artice on this.  I’m tired of missing breakouts & then trying to get in a
stock that’s now 3, 4 or 5% past the pivot point!!! I want to learn how to
nail the breakout!

Well, I better get to work.  I look forward to a long and profitable
relationship!  Your service is awesome!

My Response:

So, what’s my process in seeking a quality stock and executing a purchase at the breakout…
The process really starts after the market close the day before…looking at the overall health of the market, pinpointing sectors and industries leading the market, then finding the best stocks within those sectors and industries.  The design and layout of SelfInvestors is a reflection of the way I go about investing in the markets.  In fact I use the website just as you might as a member – and it has allowed me to become a much more disciplined and profitable investor.  The website has truly refined my strategy and to be honest I’m still refining that strategy every day.  Hence, the changes in the service.  I am constantly thinking about how I can make it easier to profit from the market and the tools you see now are just the beginning.  After all, the site is only 4 months old! It’s amazing to think about the process that has been made in that amount of time.. I’ve got many new features planned in the coming months!
 
Ok, enough rambling.  You asked specifically about getting in at the breakout.  I can tell you that this is the most asked question I get from members and I can understand why.  Very few have the ability to sit at their computers all day and watch the markets… even if you did, I think it’s a bad idea.  Before I get into how I go about buying the breakout and how you can best catch the breakout let me just add here how I responded to this question in the past:
See My Previous Response Here
Ok, John..on to your specific situation.   You are able to spend a couple minutes watching a stock as it approaches the pivot from what it sounds like.  I think we are in similar situations.  I certainly don’t have the time to watch real time price moves all day long either and wouldn’t recommend it if you could.  It leads to irrational decisions and sloppy trading.  In a nutshell, here’s the process I use (I like you’re idea of an article and will try and find the time in the next couple weeks to put together a more detailed approach .. how I go about using the tools at SelfInvestors and taking that info to execution of a purchase)

 
Night Before
1. Putting the daily report together keeps me focused on the health of the market and keeps me clued in to sector and industry group rotations
2.  I’ll sort by Total Rank and focus on stocks that are highly ranked and within an industry that is performing well (this sort will most likely bring up all of the "Hot" stocks as well)
3. Make a list of these stocks and take a closer look.. Is the base quiet? Does buy volume exceed sell volume? How close is the stock to breaking out? I will probably add another column to the Breakout Tracker soon – % from the pivot.. this way you can sort and get a list of stocks of stocks that are closest to breakout.  So you can be sure to focus on them the next day.
4. Once you have your list of a few stocks, you’ll enter them into a real time watchlist.   I use TCNet Platinum for this.
5. Make sure you know what the average hourly volume is for each stock as well as it’s pivot point and any support/resistance levels (keep track of this in a log book).  Keep in mind that the Breakout Tracker uses delayed quotes and is refreshed every 15 minutes.  You’ll need a real time look at volume levels when purchasing a breakout. 
 
Once you’ve got your hourly volume avg (Total avg volume/ 6.5 hrs in trading day) and your pivot point, you’ll want to set an alert (which you should be able to set through your broker or whatever trackig software you use) below the pivot point price. say 3-5% or so.  Is the stock still acting quiet?  Set another alert a bit closer.  You’ll know when the stock is getting ready to run because the volume will pick up significantly and you’ll see price shoot up, pull back quite a bit, shuffle back and forth and then take off.  This is the volatility and big volume at the breakout.  Once the stock hits the pivot, execute the trade without hesitation.  Believe in your research.. or mine:} and roll with it.  If you are wrong… and you will be some of the time, cut your loss.  If you’ll notice in the porftolio I am wrong more than I am right, but my average gain is more than double my loss for every trade I make.  All it takes is a few big winners and that’s the goal with my approach.  You must accept the fact that you may be wrong 50% of the time or even more.
  
Well, gotta run.. it’s been a long day.  I realize I may have rambled here.. maybe even to the point of incoherency. Please let me know if you have any further questions and thanks for being a part of SelfInvestors.. have a nice weekend!
Stocks

Screening for the Best Stocks

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It’s time again to take a look at stocks that are appearing most often in Investor Business Daily’s Screen of the Day. Stocks that appear most often are exhibiting superior fundamentals, technical strength and are often a part of a leading industry. To get the complete list you’ll need to be a subscriber of the newspaper and pick up an Excel add in over at www.excelsheets.com. The list below is for stocks appearing the most in the last 10 Screens of the Day. Next to each stock you’ll see the ranking from the Breakout Tracker which is part of the premium service at SelfInvestors.com. Stocks that are near a breakout get added to the watchlist and are ranked according to fundamental and technical analysis. A score of 20 is the best (however, no stock has ever received a score higher than 18 because no stock is perfect!). You may see a sample of this watchlist here. Appearing 8 times: Commercial Capital Bancorp (CCBI): Ranked 18, Broke out from base on 8/18/04 Notes: outstanding growth last couple years, accelerating recently – margins & ROE are excellent & rising – institutions rapidly initiating new positions – management owns large portion (35%) Appearing 7 times: Penn National Gaming (PENN): Ranked 16, trending up for several months, overextended Notes: very good earnings/sales growth for several years – margins & ROE good for its industry – very high debt (317%) Appearing 5 times: Aeropostale (ARO): Ranked 17, Broke out on May 24th and is up 25% since then Notes: outstanding sales/earnings growth (inconsistent in earnings) – excellent ROE, OK margins – institutions accumulating – top group Flir Systems (FLIR): Ranked 17, broke out April 12th and is up 47% since then Notes: sales/earnings growth accelerating rapidly last 4 quarters – very good margins & ROE – high debt (117%), but paying off quickly Headwaters Inc. (HDWR): Ranked 16, broke out today (August 23rd) Notes: growth has slowed a bit, but still strong – very good margins & ROE – paying off debt quickly Southwestern Energy (SWN): Ranked 16, Broke out on June 16th and is up 31% since Notes: very good earnings/sales last several quarters – very good margins & ROE – top group – institutions buying Wilshire State Bank (WSBK): Ranked 16, Broke out on August 16th and is up 10% since Notes: very good, consistent earnings/sales – margins & ROE are above industry averages – management owns large portion (51%) – # of institutions initiating a position is surging As always, do your own research before making any purchases. Most of the stocks listed above have risen past a proper buy point. Good Luck!

Stocks

“Stock to Watch” (Taser Int’l)

1 Comment

It isn’t often that I post here about specific stocks, but I will try and do more of that since looking at the movements in specific stocks provides good lessons in buying and selling. Taser International (TASR), a former high flyer that has since come back to earth has carved out a very interesting chart in the last few months and provides a good look at the importance of buying VS. selling volume. The one thing that stands out to me about this chart is the dramatic difference in buying vs. selling volume. It is absolutely clear that the majority of those willing to sell have sold as the number of sellers continues to decline. Those holding the stock now are strong holders, most likely holding for the long term. Once the market turns, this is a stock that could take off once again. You can see what happened in June as sellers gave way to buyers. I realize the CANSLIM method doesn’t recommend buying a stock near the bottom, but there are times when it can be extremely profitable. What should you look for in these situations? 1. Most importantly you want to see a clear trend of decreasing selling volume. 2. You also want to see the stock hold up at a major support level (more than one is preferable – trend line + moving average). When you see a stock clearly being supported at a certain level, a drop below would indicate that the risk of further selling increases dramatically. It is your clue to get out with a very small loss. That being said, should you buy as the stock is settling in at support? If you can watch the market during the day, then no. Wait until you begin to see the shift to buying with volume. This can happen very quickly, so its best to create alerts at various price points and then check a 1 or 5 minute chart for a surge in buying. Of course many aren’t able to sit and watch a stock during the day. In that case, it may be best to buy as close to support as possible and add a stop loss a few percent below major support. (** In the case of TASR, you see the support of the 200DMA as well as previous support in the 24-26 range.) 3. Try and anticipate how much time the stock will continue basing. Do this by looking at the shape of the chart and assume it may form a near symmetrical base. ** TASR looks to be forming a double bottom base. If a well formed double bottom base is forming, it will need to spend more time basing and possibly undercut the low of the first bottom at 23.76. 4. All other CANSLIM criteria apply. – Must be a leading stock (strong earnings/sales, profit margins, ROE) – Stock a part of a leading industry – Need healthy market Taser International meets all the criteria, now we just need a health market! As always do your own research before making any buy and sell decisions.

Stocks

Filtering to Find the Best Stocks

1 Comment

Once again I list here a few stocks that have come up often in Investor Business Daily’s Screen of the Day. 

Stocks that have appeared in 6 out of the past 10 screens:
Engineered Support Systems (EASI): broke out June 18th, has since returned to pivot
eResearch (ERES): broke out on June 22nd, but has returned to within 5% of the pivot

Stocks that have appeared in 5 out of the past 10 screens:
SCP Pool (SCP): broke out on April 2nd, has advanced 30% since
Winnebago (WGO): forming handle of sloppy base

Mail Bag

Volume Questions: How to Determine If Breakout Volume is Sufficient & Sell Volume

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Question:

On a breakout during the day, how do you determine if the volume is sufficient? Do you just extrapolate the breakout volume from the time of the breakout and compare it to the 50 dma of the stock’s volume? WOM likes to see a 50% volume increase on breakout. Do you use a minimum percent volume over the average? 

Another volume question. On a pull-back from a breakout, I assume you want the volume to decrease. What is your take on a pullback with an increasing volume? Again, is there a rule-of-thumb for determining an optimal volume decrease for buying in at a pullback? 

My Response:

For real time volume levels, you can compare volume to the average for any time during the day.. i discuss this in the tutorial section on buying.  Take the 50 day average and divide by 6.5 (hrs in trading day).  That gives you the hourly average volume which is also listed in the breakouts watchlist.  If the stock breaks out at 8:30AM take the hourly average and Multiply by two to get the average at that point in the trading day.  Compare this number to the trading volume of the stock.  On a delayed basis the percentage change from the average volume is published every 15 min. for each stock in the Breakout Tracker.
 
Regarding selling volume on an intraday basis you can use the method above to see if volume is below average at that point in the trading day.  To see the trend over several days or weeks, just pull up a chart (stockcharts.com is great) and look at the red volume bars of the stock.  Are they getting shorter as the stock declines?  You won’t always see a good decrease in volume.. what’s important is that selling volume isn’t surging.  On pullbacks, watching to see if it finds support at key levels is often just as, if not more important than the volume level..  Of course nothing is 100% certain in the stock market.  You use this information to gauge probability of success.  The key to becoming a good chart reader is to just start looking at the charts.  After you’ve looked at thousands of charts, you will notice certain trends and patterns emerge.