On November 18, 2021 Solaris Resources (TSX:SLS) traded above average volume by hundreds of thousands of shares at nearly 1.7 million in daily volume. Solaris’ share structure has one of the highest insider ownerships for a junior miner, begging the question of why exactly did volume spike on that day?
Could it have been that insiders are shifting positions ahead of upcoming drill results? Or is something else happening with retail investors to draw such high volume?
It would first help to understand what a breakout above regular price action and traded volume can mean for investors. Often higher volume will drive prices higher or lower depending on the bid-ask spread, but in this case, shares traded only 2% higher on the day.
The stock was not outside of its normal bounds, and closed just below C$14, at $13.90. The uptick in volume is notable for how it didn’t accompany a significantly different price action, but potentially foreshadows new price action coming down the line.
For this reason, it could be inferred that the expectation of news coming down the pipeline could be the reason for the higher than average daily volume. The company has had a run of successful assay results as part of its ongoing exploration at the Warintza Project in Ecuador.
An expansion of the Warintza Porphyry Cluster, multiple back-to-back discoveries, the commencement of maiden drilling at Warintza South, and positive preliminary results at Warintza Central have seen shares climb consistently month after month.
The stock is up over 1000% since the company’s IPO in 2020, and the bullish sentiment indicated by multiple breaks above the 50-day moving average would seem to indicate that buyers are always present.
Whether the larger than average trade volume is indicative of insiders moving shares ahead of news or higher investor interest due to the company’s performance and the drill program is yet to be seen. For now, investors will be watching closely whether Solaris (TSX:SLS) continues to climb higher.