Eoin Treacy's view I rate the report as an essential read for anyone interested in the ramifications of shale gas prices from an investment perspective because it identifies the common thread which links the fertiliser, driller, chemical and pipeline sectors. The better performing companies profiled in Comment of the Day on February 15th with relation to Yara's purchase of Terra Industries and March 9th with relation to shale gas drillers, are joined in this report by similarly well placed companies.

Shale gas drilling has great promise but faces equally challenging environmental questions which will need to be resolved if the resource is to be exploited for the benefit of all interested parties which should be a priority if the industry is to have a long-term future. US natural gas supply is virtually assured given the resource base. The question now is at what price the commodity will sell for given the fundamental change affecting the market. The demand side of the equation remains comparatively weak with US economic growth anaemic and alternative uses for natural gas in the transport, power generation and home heating sectors offering the potential for longer-term demand but only at the planning stages at best.

If we take a somewhat long-term view, natural gas prices ranged between $1 and $4 from 1990 to 2000 before breaking upwards and hitting a number of accelerated peaks in the last decade. Prices rallied emphatically from near $2.50 in September and encountered resistance in the region of $6 in January. Similar, patterns are evident in the grain and bean complex and prices have been ranging above the long-term bases for more than a year. I wonder if natural gas prices might do something similar, and build support more or less above the old base. A sustained move below $3.50 or above $6 would be required to negate this theory and in the meantime, prices continue to drift lower as they return to test an area of prior support in the region of $4.30. An upward dynamic would now be required to check the decline.

Oil continues to outperform natural gas prices and the ratio would need to sustain a move below 12.66 to question scope for further upside. In absolute terms, oil is encountering at least short-term resistance below the January high and needs to sustain a move above $84 to question scope for some further lower to lateral ranging.

Chemical companies such as Dow Chemical bottomed a year ago and has rallied impressively since. The uptrend lost momentum from July and encountered resistance in the region of $30 from January. Prices dipped back to test the 200-day moving average in February but are currently rallying back to the test the January high. A sustained move back below $25 would now be required to question scope for further higher to lateral ranging.

Eastman Chemical has posted a smaller percentage gain from the low but remains in a consistent step sequence uptrend. It found support in February in the region of the upper side of the previous range and would need to sustain a move below $53 to question scope for further upside.

PPG consolidated its impressive advance from September, in a steady mean reversion, defined by the 200-day moving average. It is now breaking upwards once more and a sustained move below $57 would be required to question scope for additional upside.

Pipelines are also benefitting from the development of shale gas. Atlas Pipeline Partners completed a first step above the 15-month base last week and a sustained move back below $11.50 would now be required to question scope for further upside.

Enterprise Product Partners consolidated in the region of the 2007 high from January but broke upwards to new highs last week and while a little overextended in the short term, a downward dynamic would be required to check momentum beyond a brief pause. The medium-term upside can continue to be given the benefit of the doubt in the absence of a sustained move below the mean; currently near $29.

Targa Resources Partners remains in a consistent uptrend and broke upwards to new recovery highs two weeks ago. A sustained move below $22.50 would be required to question the integrity of the medium-term move.

Williams Partners continues to accelerate higher. The first clear downward dynamic, sustained for more than a day or two is likely to signal the onset of a medium-term reversionary process.

Agrium, remains one of the better performing fertiliser companies and broke upwards to new recovery highs last week. A downward dynamic would now be needed to check scope for further upside.