* FTSEurofirst 300 up 0.8 pct, Euro STOXX 50 0.9 pct * Good start to U.S. fiscal talks spur rebound * Charts still bearish after support break By Francesco Canepa LONDON, Nov 19 European stocks rose early on Monday, bouncing from a 3 1/2-month closing low, on signs political negotiations to overcome a major fiscal policy disagreement in the United States had begun well. On Friday, leaders of the U.S. Senate and House said they would be flexible in efforts to settle policy differences to avert a $600 billion 'fiscal cliff' of tax hikes and spending cuts, sparking a late rally on Wall Street. "The rebound should be quite significant because there are new hopes regarding the fiscal cliff and last week was quite bad," a London-based trader said. He expected France's CAC 40, up 1.2 percent at 3,379.82 points at 0916 GMT, to rise between 1 and 2 percent in the very short term. The broader FTSEurofirst 300 index was up 0.8 percent at 1,076.03 points, led by sectors that depend on economic growth, such as auto stocks, basic resources and banks. Miner Eurasian rose 3.9 percent, while lenders Barclays and Commerzbank added 3.2 percent and 3.1 percent, respectively. The FTSEurofirst 300 index had fallen 2.7 percent in the previous week as investors fretted about how the U.S. government will avoid the fiscal cliff, which without a political agreement kicks in early in the new year and could drag the U.S. economy back into recession. OUTLOOK STILL BEARISH But traders warned market sentiment remained fragile and any sign of political frictions in the United States and the euro zone, where a meeting of finance ministers was set to discuss aid to Greece on Tuesday, could sent shares into reverse. Charts on the euro zone Euro STOXX 50 index, up 0.9 percent to 2,450 points, pointed to a still-negative outlook after the index broke below its October 11 and November 9 bottoms last week, showing the selling pressure was piling up. "The outlook is still bearish for the moment as last week we broke the recent lows," Ouri Mimran, a technical strategist at Natixis in Paris, said. "I think the market is going to consolidate the up move between June and September." He said the Euro STOXX 50 could fall back to 2,394 points and 2,263 points by the end of the year, corresponding to the 38.2 percent and 61.8 percent retracements of the June-September 27 percent rally.