Manzano's side are third from bottom of the table with just 24 points, but have won their last two, against Granada and Sevilla.
And the 57-year-old, who has won three times at the home of Real over the years is aiming for another upset.
"The team's performances have really improved, and I think that the thing to do on Saturday against Real Madrid is ensure these feelings are kept," Manzano told reporters.
"The truth is that the spirit of the team, individually and collectively, has risen.
"That's important when we face games as difficult as this. I think we're going out on the field believing we can beat any rival, and that's how it must be done.
"What we try to do is seek balance between defensive and offensive.
"A point against Real Madrid is good, but let's go for three. "
They will face a Real side who have won their last six matches in all competitions, with three of those coming against Barcelona and Manchester United.
And with international week coming up Jose Mourinho is likely to pick his strongest side.
Raphael Varane, Sergio Ramos and Fabio Coentrao all missed the weekend win against Celta Vigo but are set to return to the starting XI.
The game however comes too soon for Angel Di Maria who will be absent with a leg injury.
"The team are doing well at the moment and have a lot of confidence. We hope to continue like this," assistant boss Aitor Karanka told reporters.
"We will do our best tomorrow [Saturday] in order to win the three points.
"We choose the best line-up possible for every match we play."
Madrid were today drawn against Galatasaray in the quarter-finals of the Champions League, meaning Mourinho will come up against former players Didier Drogba and Wesley Sneijder.
"It would be wrong to think that Galatasary are easy to beat. It's going to be a complicated tie," added Karanka.
"But we are only focused on tomorrow's [Saturday's] league match. We are not thinking about the Champions League."