Key Technical Levels To Watch In Stocks, Gold And Oil

• Goldman Sachs believes the 2,025-2,039 region will be critical in determining the trajectory of the S&P 500.
• The firm sees bearish technical setups in the Japan, China and gold markets.
• Goldman believes that WTI crude oil prices are technically positioned for a bounce as high as $62 in coming months.

In a new report, Goldman Sachs includes several charts that technical traders should be watching in coming weeks. Here’s a closer look at six charts from the report.

The first chart is a short-term look at the S&P 500. Goldman notes that the critical level to watch for the S&P is the 2,025-2,039 region. The report notes that the resistance will likely be difficult to break, but that a move above 2,040 would certainly make the index look “more constructive.”

The next chart is a longer-term chart of the S&P 500. Goldman draws comparisons between the recent market breakdown and the breakdown that occurred back in late 2011. If the previous breakdown is, in fact, an appropriate comparison, the S&P 500 will be back on track soon enough.

Much of the recent market worry has been centered on Asia. Goldman notes that Japan’s Nikkei chart recently broke out to the downside of a bearish wedge formation, and Goldman’s target of 14,529 implies that the index could see at least one more leg down.

The technicals aren’t looking up in China either. The Shanghai Composite has rebounded from its August lows, but Goldman sees the potential for “negative underlying bias” as the index approaches major resistance at 3,406-3,508.

Despite recent strength, Goldman also sees a major roadblock ahead for gold. The firm sees a confluence of the 100-day weighted moving average and a downward-sloping resistance line at around 1,230.

Finally, after all the bearish charts, Goldman includes a majorly bullish prediction for WTI oil prices. The firm notes the potential for WTI to climb “significantly higher” in coming months, and even suggests that the benchmark could reach as high as $62/bbl. According to Goldman, WTI must remain above the $43.71 level to keep its bullish technical setup in place.

In the past month, the SPDR Gold Trust (ETF) GLD, SPDR S&P 500 ETF Trust SPY, and the United States Oil Fund LP (ETF) USO are all higher by more than 2.3 percent.

Disclosure: the author holds no position in the stocks mentioned.