Technical analysis predicts future prices based on past prices and volumes. Most traditional technical analysis is mumbo-jumbo. But research shows that many prices do not follow a pure random walk. Trending is a positive correlation between successive price changes.
Mean reversion is a negative correlation.
Both phenomena can happen for the same asset on different time scales. To capture daily trending or mean reversion, we use the previous change in the price of a fund as a predictor for the current day's change.