Despite a mammoth rally in stocks over the past 2 1/2 months, analysts remain optimistic that there is further room to advance this week. An impressive surge Friday left the major averages with big gains in the shortened holiday week, with the Dow Jones Industrial Average ending up 249 points, or 2.9%, at 8850. The Nasdaq rose 85 points, or 5.6%, to 1596 and the S&P 500 closed up 30 points, or 3%, at 964. Investors have grown increasingly optimistic about an economic revival in recent weeks, despite mixed data and some cautious comments from Federal Reserve Chairman Alan Greenspan regarding deflation. Since hitting a low on March 12, the Nasdaq has soared 27%, while the Dow and S&P 500 have gained about 20%. Although some market watchers have expressed concern that stocks have come "too far too fast," a number of analysts called for further gains in the week ahead. "I think this market is probably going to continue to rally," said Peter Cardillo, chief market strategist at Global Partners Securities. "The perception is that the economy is going to pick up in the second half of the year." Cardillo said the data Friday seemed to bolster the case for a rebound. The Chicago Purchasing Management Index rose to 52.2 in April, above expectations for a reading of 49. Meanwhile, The University of Michigan's consumer confidence index for May jumped to 92.1 from 86 in April. Still, investors conveniently chose to ignore a drop in personal spending. "The market is gripped by the bulls," Cardillo said. "Are we approaching levels where one might question valuations? Yes, but the technical outlook of the market continues to strengthen." Richard Dickson, a technical analyst at Lowry Research, agrees that stocks could see some "follow-through," at least in the early part of next week.