Last week, high short-interest, momentum-driven stocks surged amidst market highs, sparking sustainability concerns. Despite skepticism, history shows momentum can carry further than expected.

The Fear & Greed Index at 62 and the SPDR S&P 500 ETF Trust with an RSI of 71 suggest room for momentum. Three heavily shorted stocks show technical setups for potential upside if sentiment remains positive.

HIMS faces scrutiny for its advertising and telehealth practices but has seen a remarkable 139% YTD and 259% 12-month gain. With technical consolidation and a 38% short interest, breaking $65 could trigger a powerful squeeze.

DLO, specializing in cross-border payments, surged post-earnings with a 40% YTD increase. Wall Street raised price targets to $14 amidst a 23.4% short interest. Holding above $15 and breaking $16 could lead to further momentum.

TEM, excelling in AI healthcare, has surged 160% YTD with a focus on precision medicine in oncology. Consolidating near its all-time high with a 25% short interest, a breakout could be imminent.

Momentum remains strong despite market stretch. HIMS, DLO, and TEM offer bullish setups with technical strength and high short interest, potentially benefiting from continued momentum.

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