Manchester United manager Louis van Gaal believes his team can capitalise on Manchester City's recent dip in form in Sunday's derby at Etihad Stadium.

City squandered a two-goal lead in the Champions League at CSKA Moscow on 21 October and then lost at West Ham and to Newcastle.

"What we have seen in the last matches was not so good," Van Gaal said.

"We have a good feeling about this match. We need a good result and it could be against Man City."

City are in third place in the Premier League, six points behind leaders Chelsea.

Since losing 5-3 in a remarkable match at Leicester on 21 September, Van Gaal's United are unbeaten and would move within a point of their local rivals with victory at City.

However, a win for Manuel Pellegrini's City would be their fourth successive derby win - a feat not achieved for 44 years.

"It is one of the 38 matches we have to play but, for the fans, it is unbelievably big as a rivalry," said Van Gaal, 63, who said assistant manager and United's appearance record holder Ryan Giggs had left him in no doubt about the fixture's importance.

''I have felt that, also with a lot of the players in the squad but especially with Ryan Giggs," the Dutchman said before his first Manchester derby.

''He presented the analysis of Manchester City, and I felt more tension with him. It was good to see that."

United brought in six new players this season at a cost of £150m, including Angel Di Maria for a British record £59.7m and Van Gaal believes they can match City's impressive galaxy of talent.

"I am not jealous of the squad of Manchester City," he said. "I am proud of my players and that is the most important thing and when we play like a team then we have a big chance to win."

Legendary former striker Denis Law, who had two spells at City between 1960-61 and 1973-74 either side of an 11-year stint at United (1962-73), says the potential return of captain Wayne Rooney to United's starting line-up after suspension would be a "massive boost" for the Red Devils.

And the 74-year-old thinks Rooney will overtake him on the list of all-time goalscorers at Old Trafford this season, before he climbs to the top of the pile.

England forward Rooney, who has 219 goals for United, is now only 18 goals short of Law (237), who is second behind 249-goal Sir Bobby Charlton.

"I am sure he can pass it this season," Law said. "And if he stays away from injuries he will be the highest scorer in Manchester United's history.

"He and Robin van Persie are two of the best strikers in the world really. I would love to have played with them."