Gil Alexander summed up the limit ranges in the following thread (o-360). Same limits should apply to the o-320, but you may want to customize.... use this as a starting point.
I'm reposting the limit ranges here as well from the above thread (I think this should be a stickie somewhere)....
OIL TEMPERATURE
Upper Red 245F - Lycoming Operators Manual figure
Upper Yellow 220F - 245F - based on desired temp. of 170F plus margin and Lycomings engine life numbers below...
Green 75F to 220F - see VAF discussion on the lower number - some folks prefer 100F - 220F range
No Lower Yellow area
OIL PRESSURE
Upper Red 115 psi
Yellow upper 95 to 115 psi - this for starting and take-off only
Green area 55 to 95 psi - normal operating area from Operators manual
Lower Yellow 25 to 55 psi - operating area while idling
Lower Red 25 psi
CYL HEAD TEMP
Upper Red 500F
Upper Yellow 435F to 500F
Green area 150F to 435F - the 150F is my number, Lycoming gives no lower number, but 150F is really cold for a CHT....
FUEL PRESSURE (carb)
Red upper 8 psi - check this, it is from my memory...
Green area 0.5 psi to 8 psi
Red lower 0.5 psi - no yellow for this parameter....
This is a good starting point - in general, I think you want the red to activate alarms, and yellow to be a warning (non-audible)
NOTE - the CHT numbers are high - this is what Lycoming says....
8. For maximum service life, maintain the following recommended
limits for continuous cruise operation:
a. Engine power setting ? 65% of rated or less.
b. Cylinder head temperatures ? 400˚ F. or below.
c. Oil temperature ? 165˚ F. ? 220˚ F.
After break-in, and experience in your plane, you might want to set the CHT numbers lower for
your specific installation...