Techniques for estimating cloud motion and stability for intra-hour forecasting using a ground-based sky imaging system are presented. A variational optical flow (VOF) technique was used to determine the sub-pixel accuracy of cloud motion for every pixel. Cloud locations up to 15. min ahead were forecasted by inverse mapping of the cloud map. A month of image data captured by a sky imager at UC San Diego was analyzed to compare the accuracy of VOF forecast with cross-correlation method (CCM) and image persistence method. The VOF forecast with a fixed smoothness parameter was found to be superior to image persistence forecast for all forecast horizons for almost all days and outperform CCM forecast with an average error reduction of 39%, 21%, 19%, and 19% for 0, 5, 10, and 15. min forecasts respectively. Optimum forecasts may be achieved with forecast-horizon-dependent smoothness parameters. In addition, cloud stability and forecast confidence was evaluated by correlating point trajectories with forecast error. Point trajectories were obtained by tracking sub-sampled pixels using optical flow field. Point trajectory length in mintues was shown to increase with decreasing forecast error and provide valuable information for cloud forecast confidence at forecast issue time.