I am in need to place the label of my shapes outside of the shape and i suspect that label is outside of the shape bounds too. I am doing that by manipulating the offset of the text style.
Unfortunately, when i am moving the shape in diagram, a trail of my shape remains draw on the diagram resulting in an very ugly effect as you can see in the image.

The image is tested with Shape Labels example from Diagram Examples. I just modified the Text style of blue shape (right one with rotated labels) offsetting on the Y axis 65 points so the small text "Rotated Label 1, Wrapped" is just outside of the shape.

Is there any way to place my label outside the shape paths and not seen this ugly effect?

To avoid this specify the shapes you want to layout (i.e. only the groups you want to layout and the edges which connect them). Take a look at the Document Object Model -> Groups -> Group Layout example (and especially on the LayoutGroups method) which comes with the diagramming component for a sample implementation.

Best Regards,
Nevron Support Team