* Demand seen guiding market to higher ground
* Market highest since March 7

NEW YORK, March 26 (Reuters) - Cotton futures finished
Monday at a three-week high on chart-based speculative buying
plus possible consumer buying and the market could continue
higher, analysts said.
The benchmark May contract on ICE Futures U.S. rose
1.28 cents, or 1.43 percent, to end at 90.91 cents per lb,
dealing from 89.36 to 91.01 cents. It was the loftiest close on
the spot cotton contract since March 7
Volume traded Monday amounted to slightly over 20,300 lots,
about 15 percent under the 30-day norm, Thomson Reuters data
showed.
"It's holding like a rock," said Mike Stevens, independent
cotton analyst based in Mandeville, Louisiana.
Technically, the market traded to within sight of the
100-day moving average about 92.65 cents and should take aim at
that level in the days ahead.
"The...charts are starting to turn up," said Stevens, who
added that cotton will likely see some follow-through buying in
the next few sessions.
Traders said any advance will probably peter out later in
the week as players tweak positions before the U.S. Agriculture
Department hands out its keenly awaited potential plantings
report on Friday.
Another dealer said cotton futures have found solid support
at 87 cents, basis May, because it is an area where mill and
trade buying has shown up and propelled fiber contracts up.
Open interest, an indicator of investor exposure, rose for
the 12th straight session to 190,909 lots as of March 23, the
highest since Feb. 9, ICE Futures U.S. data showed.
The CFTC report on Friday showed investors increasing their
net short position in the market by 231 lots to 7,784 lots, the
largest net short position in about three years.
At the start of February, investors were holding a net long
position in cotton of more than 14,000 lots.