Two advances do not a rally make. Despite today's broadly based gain of 7.02 points in the Dow Jones industrial average on top of Thursday's 5.37 point rise, most analysts remain skeptical that a stock market rally is brewing.

Rather they see a technical rebound from the market's recent protracted slide, leavened by some good news on the economic and financial fronts.

Nonetheless, the two-day gain put the market into positive territory for the week by 7.97 points, only the third weekly advance in the last three months.

Besides bouncing back from a technically oversold position, the market has also been encouraged by some positive news developments, according to analysts.

They cite the 0.8 per cent gain in the index of leading indicators for August, a hefty 46 per cent gain in construction awards for August over a year ago, the $1.1 billion drop in the basic money supply that somewhat eased fears of further Federal Reserve tightening of monetary policy, and Citibank's decision today not to raise the prime interest rate from it's current 7.25 per cent.

The Dow Jones average of 30 industrials finished at 847.11 today. Big Board volume came to 21.17 million shares against 21.16 million Thursday.

Standard & Poor's index of 400 industrials rose .73 to 106.22; S&P's 500-stock composite index was up .68 at 96.53.

At the American Stock Exchange, Houston Oil & Minerals was the volume leader, up 1 3/8 at 34 7/8. The Amex market value index jumped 1.04 to 118.88. The NASDAQ composite index for the over-the-counter market was up .58 at 100.85,.

"I don't think we're out of the woods by any means," said Newton F. Zinder, vice president at E.F. Hutton & Co.

"What it would really take is a much clearer picture of where the economy is heading and a resolution of some of the uncertainties pending before Congress," he added. These uncertainties relate to the President's energy plan, which is being mauled by the Senate, and the still to be introduced tax overhaul plan, which will have important implications for investors.

Leon Cooperman, head of the investment policy committee at Goldman, Sachs & Co. also expressed the view that "until we get more progress in these two legislative areas, the market will stay directionless."

"The market was pleasantly surprised by the near-term favorable movement in the monetary aggregates," Cooperman said. "And given its uninterrupted slide of the last few weeks, this is a brief reprieve. But I doubt that it's definitive turn in market direction."

Other uncertainties continuing to weigh on investors include the continuing floodtife of red ink being run by the United States in its balance of payments accounts - a tide now expected to extend into 1979 - which has heightened fears of protectionist outbreaks. Cooperman also cited "the growing observations that the Carter administration is moving away from fighting inflation to a greater concern with fighting unemployment."

There are, however, some cautiously positive analysts.

Pointing to many of the same negatives, William W. Helman who heads the investment policy committee at Smith Barney, Harris Upham & co. Nonetheless believes "the various short-term negative pressures on investor sentiment may be fairly close to peaking, if they have not already peaked.

"Almost by definition, a market bottom occurs at the peak of investor concern about the future," he said. He added, "the chances that the market will rally before year end seems reasonably good, though such a rally may be from a still lower level." But Helman said he is also concerned that "the underlying erosin of investor preference for equities" which has been going on for seven years "is not yet finished."

One of the more fascinating of the current market analyses comes from Merrill Lynch, Pierce, Fenner & Smith. In that firms latest investment strategy bulletin, Merrill says it does expect a near term rally, but projects a deeper decline beyond that in which is still a long-term bear market cycle.

"With the market down approximately 15 per cent from the cyclical peak, we think that the stage is being set for a broad-based rally - a rally that may be fueled by a substantial improvement in 1978 earnings and dividened prospects for basic industry, the dow averages, the S&P 400; the capitulation of those forecasters currently predicting the end of the economic recovery late in 1977 or early in 1978; and activity generated as the tax-reform proposals are interpreted as generally favoring high-yielding high tax rate companies at the expense of financially leveraged, emerging growth companies," the publication states.