Points out the way indicated (5)
I believe the answer is:
shown
'indicated' is the definition.
(I've seen this in another clue)
'points out the way' is the wordplay.
'points' becomes 'sn' (two compass points).
'out' is an insertion indicator.
'the way' becomes 'how' (how something is done).
'sn' going around 'how' is 'SHOWN'.
(Other definitions for shown that I've seen before include "Displayed" , "Demonstrated" , "Exhibited" , "Explained" .)