Observes stone moving (5)
I believe the answer is:
notes
'observes' is the definition.
('note' can be a synonym of 'observe')
'stone moving' is the wordplay.
'moving' indicates anagramming the letters (letters are moved around).
'stone' anagrammed gives 'NOTES'.
(Other definitions for notes that I've seen before include "Memos; marks" , "Recorded summaries" , "Takes into account" , "Marks on a stave" , "Brief letters; money" .)