Sample drag code

local dragTargets = {}

local testWell = display.newRect(0, 0, 60, 60)
testWell:setFillColor(0xFF, 0x00, 0x00)
testWell.x, testWell.y = display.contentWidth / 2, display.contentHeight * 0.25

function testWell:touch(event)
    local carry = dragTargets[event.id]
    if event.phase == "ended" and carry then
        carry:Drop(self.x, self.y)
        self:setFillColor(0x00, 0x00, 0xFF)
        return true
    end
end
testWell:addEventListener('touch', testWell)

local testDrag = display.newCircle(0, 0, 28)
testDrag:setFillColor(0x00, 0xFF, 0x00)
testDrag.x, testDrag.y = display.contentWidth / 2, display.contentHeight * 0.75

function testDrag:Drop(x, y)
    self.oldX, self.oldY, self.id = nil
    self.x, self.y = x or self.x, y or self.y
    dragTargets[self], dragTargets[self.id] = nil
    Runtime:removeEventListener('touch', self)
end

function testDrag:touch(event)
    if event.id == self.id then
        if event.phase == "moved" then
            self.x, self.y = event.x, event.y
        elseif event.phase == "ended" then
            self:Drop(self.oldX, self.oldY)
        end
    end
end

function startDrag(event)
    local id, target = event.id, event.target
    if event.phase == "began" then
        dragTargets[id], dragTargets[target] = target, id
        target.id = id
        target.oldX, target.oldY = target.x, target.y
        Runtime:addEventListener('touch', target)
        return true
    end
end

testDrag:addEventListener('touch', startDrag)