NEW YORK, Nov 8 (Reuters) - Cotton futures settled higher Tuesday on
late investor short-covering as the market staged a rebound after hitting
its downside technical objectives, analysts said.

The key December cotton contract on ICE Futures U.S. rose 0.86
cent to conclude at 97.62 cents per lb, moving from 95.96 to 97.96 cents.

Total volume traded Tuesday hit almost 28,200 lots, more than
three-quarters above the 30-day norm, preliminary Thomson Reuters data and
ICE Futures U.S. data showed.

On a technical level, dealers said the downside targets in cotton used
to be the recent low of 96.47 cents, basis March. When that was breached in
Tuesday's session, independent analyst Mike Stevens in Louisiana said the
next target became 'the lower end of the Bollinger Band (at) 95.78
(cents).'

The March cotton contract came to within a hair of hitting 95.78 and
then began coming back as the selling spree dried up. 'It was ripe for a
short-covering bounce,' said Stevens.

Analysts said followers of index funds also continued to roll positions
out of the December contract before it goes into first notice day for
deliveries later in the month.

The trade continued to carefully monitor developments in Europe,
especially after the announcement that Italian Prime Minister Silvio
Berlusconi will resign.

Traders said they will be looking toward the release on Wednesday of
the monthly supply/demand report of the U.S. Agriculture Department to see
if the USDA will cut its estimate of U.S. cotton production to reflect
drought damage in Texas, the biggest cotton growing state in the country.

Open interest, usually taken as an indicator of investor exposure,
stood at 165,305 lots as of Nov. 7, exchange data showed.

Total volume traded Monday reached 31,532 lots, up from the prior tally
of 18,009 lots, ICE futures U.S. data reported.