When there is a breakout from a trading range, the point of breakout is also the point of maximum risk. This is because of the risk that the breakout may be a failure. If it is a failure then the trader has probably purchased the security right at the highest price. As prices continue to move in favor, the risk of a false breakout comes down, but the entry level has gone up!
It is possible to qualify breakouts by volume, overhead resistance, length of the trading range.
Volume: this breakout has moved up on relatively high volumes.
Overhead resistance: there is no immediate resistance beyond 3250. Thus the breakout is not likely to meet with quick resistance.
Length of trading range: This is a problem. The breakout has come from a trading range that developed from October 08 to March 09. So far so good. But, it is also true that the current rally has moved up from 2540 to 3200+ almost non-stop. A better scenario may have seen the Nifty consolidate in the 2900 - 3100 zone for maybe a month and then breaking out.
So, this breakout gets two out of three. Which means, like most trading setups, there is a risk. If you understand the risk of a failed breakout, then go ahead and buy on dips. markets can surprise us on the upside.