NEW YORK, Feb 26 U.S. natural gas futures were trading slightly higher early Tuesday, with the expiring March contract underpinned by expectations that cold weather will continue for the eastern half of the nation well into next month. Front-month gas prices rallied 5.2 percent in the previous two sessions, but traders said prices at current levels were still cheap enough to draw support from some utilities switching away from more expensive coal for power generation. In addition, they noted that hefty nuclear plant outages this week, running between 15,000 and 16,000 megawatts, were also boosting demand for gas. Gas-fired units are typically used to offset shut nuclear generation. At 9 a.m. EST (1400 GMT), front-month March gas futures on the New York Mercantile Exchange, which expire later today, were up 1.3 cents at $3.427 per million British thermal units, after trading between $3.394 and $3.455. Technical traders noted the nearby contract on Monday gapped higher on the open and closed above near resistance at the 40-day moving average in the $3.33 area. Most agreed a strong finish today could set the stage for more upside. Commodity Weather Group, a forecaster, still expects a cold-prevailing pattern to continue through most of March, which should translate into decent heating demand at the end of winter. But even if March turns out cold, most traders see only limited upside potential for prices, with gas inventories still high, production flowing at or near an all-time peak and milder spring weather only several weeks away.