Eoin Treacy's view Shale gas and oil development has gained a great deal of attention as volumes have increased. The prospect of energy independence and an improving US trade balance has encouraged investors to seek a way of benefitting from this evolution. However this is not a simple task since the surge in production has put downward pressure on pricing. Unconventional oil and gas production has generally been of the greatest benefit to companies that thrive in a low cost energy environment or those that charge by volume transported.

Concurrently, the Macondo oil spill in the Gulf of Mexico soured public opinion towards offshore resource development, the White House announced tighter regulations on the sector; massive fines for the companies involved took a toll on investment returns and interest in the sector declined. However, drilling activity has picked up in the Gulf of Mexico of late. Additionally, while unconventional oil and gas is primarily a US story so far, a great deal of additional supply globally is also expected to come from offshore deposits.

When one plots the returns of these two sectors, a general trend of outperformance among companies with an offshore or deep-water focus is now evident. Among the shale plays EOG Resources, Gulfport Energy and Range Resources are relative strength leaders but the wider sector remains under pressure. .

EOG Resources is one of the largest producers of oil and gas in the Eagle Ford and Bakken Shale deposits. It broke out of its 30-month range in December and has been consolidating in the region of $120. A sustained move below the 200-day MA, currently near $112, would be required to question medium-term scope for additional upside.

Gulfport Energy has operations in the Canadian Oil Sands, Louisiana, the Utica and Niobrara shales and the Permian Basin. The share found support in late June following a steep decline and has trended consistently higher since, to hit new all time highs by December. A break in the progression of higher reaction lows, currently near $36, would be required to question medium-term scope for additional upside.

Range Resources has been mostly rangebound for more than a year but has held an upward bias. It posted an upside weekly key reversal three weeks ago and a sustained move below $60 would be required to question medium-term scope for additional upside.

While to date the unconventional oil and gas revolution has been mostly limited to the USA, the potential for substantial additional supply growth globally remains undiminished. Polskie Gornictwo Naftowe I Gazownictwo SA of Poland has benefitted of late from Gazprom's price cut but is also among the highest probability unconventional oil and gas explorers in Europe. The share broke out of its base in early December and has now rallied for 10 of the last 11 weeks. While overbought in the short term, a clear downward dynamic will be required to check momentum. (Also see Comment of the Day on April 13th 2011).

Noble Energy has both shale and offshore projects. The share broke out of an almost two-year range this week and a sustained move below $100 would be required to question medium-term scope for additional upside.

Chevron as a major oil producer has both onshore and offshore operations. The share pushed successfully back above the $110 level at the beginning of the month and a sustained move below $105 would be required to question potential for additional medium-term upside.

Italy's Eni completed a four-year base three weeks ago and a sustained move below €17.50 would be required to question recovery potential.

In the machinery and equipment sector Cameron International produces pressure control, processing, flow control and compression systems. The share has been rangebound since retesting the psychological $60 area in 2011 but has held an upward bias since June. A sustained move below $52.75 would be required to check potential for a successful upward break.

Dresser Rand broke out of an 18-month range three weeks ago and while somewhat overbought in the short-term a sustained move below the 200-day MA, currently near $52, would be required to question medium-term scope for additional upside.

Dril-Quip focuses on offshore drilling and production equipment. The share has exhibited an upward bias since 2011 and has a medium-term rounding characteristic consistent with accumulation. A sustained move below $70 would be required to question medium-term upside potential.

In the offshore drilling sector Ensco International has been ranging below $60 since mid-2011 and broke out to new recovery highs three weeks ago. A sustained move below $57 would be required to question medium-term scope for additional upside.

Rowan Cos. operates offshore drilling rigs and has been ranging mostly above $30 since late 2011. It rallied impressively from that area three weeks ago and a sustained move below it would be required to check potential for additional higher to lateral ranging.

Diamond Offshore Drilling has been ranging mostly above $60 since 2009 but found support in the region of the 200-day MA three weeks ago and a sustained move below $67 would be required to question potential for further higher to lateral ranging. .

Atwood Oceanics found support in the region of the MA from October and has returned to test the psychological $50 area. A sustained move above that level would reassert medium-term demand dominance.

Noble Corp appears more likely than not to be able to complete its current range with a successful move above $40.

In the services sector Oceaneering International remains in a relatively consistent medium-term uptrend and broke out of an almost yearlong range this week, having found support in the region of the MA from November.

Helix Energy Solutions Group also focuses on offshore services and broke successfully above $20 for the first time since 2008 three weeks ago. A sustained move below that level would be required to check recovery potential.

John Wood Group remains in a consistent medium-term uptrend and most recently found support in the region of the 200-day MA in December.

Petroleum Geo-Services concentrates on offshore seismic operations. The share has been consolidating above the 2-year range since September as it closes the overextension relative to the 200-day MA. TGS Nodec Geophysical is also worthy of mention. It remains in a consistent medium-term uptrend and also broke out to new all-time highs this week.

When the performance of the above shares is taken into account. There are a small number of shale oriented companies that are exhibiting medium-term patterns of demand dominance. However there is much greater commonality in the offshore drilling and services sector where the number of breakouts from well defined medium-term ranges is particularly noteworthy not least because of the negative perceptions of growth in the offshore segment.