diff --git a/packages/client/src/components/Component.svelte b/packages/client/src/components/Component.svelte
index 980e7cd80b..6192004b42 100644
--- a/packages/client/src/components/Component.svelte
+++ b/packages/client/src/components/Component.svelte
@@ -171,18 +171,23 @@
     conditionalSettings = result.settingUpdates
     visible = nextVisible
   }
+
+  // Drag and drop helper tags
+  $: draggable = interactive && !isLayout && !isScreen
+  $: droppable = interactive
+  $: dropInside = interactive && definition?.hasChildren && !children.length
 </script>
 
 {#key propsHash}
   {#if constructor && componentSettings && (visible || inSelectedPath)}
     <div
       class={`component ${id}`}
-      data-type={interactive ? "component" : ""}
+      data-type={interactive ? "component" : "readonly"}
       data-id={id}
       data-name={name}
-      data-draggable={interactive && !isLayout && !isScreen ? "true" : "false"}
-      data-droppable={interactive ? "true" : "false"}
-      data-droppable-inside={definition?.hasChildren ? "true" : "false"}
+      data-draggable={draggable}
+      data-droppable={droppable}
+      data-droppable-inside={dropInside}
     >
       <svelte:component this={constructor} {...componentSettings}>
         {#if children.length}
@@ -202,6 +207,6 @@
     display: contents;
   }
   [data-draggable="true"] :global(*:hover) {
-    cursor: grab !important;
+    cursor: grab;
   }
 </style>
diff --git a/packages/client/src/components/preview/DNDHandler.svelte b/packages/client/src/components/preview/DNDHandler.svelte
index fe4d7f4d59..2437386929 100644
--- a/packages/client/src/components/preview/DNDHandler.svelte
+++ b/packages/client/src/components/preview/DNDHandler.svelte
@@ -5,9 +5,7 @@
   import DNDPositionIndicator from "./DNDPositionIndicator.svelte"
   import { builderStore } from "stores"
 
-  let dragTarget
-  let dropTarget
-  let dropMode
+  let dragInfo
   let dropInfo
 
   const getDOMNodeForComponent = component => {
@@ -18,26 +16,28 @@
 
   // Callback when initially starting a drag on a draggable component
   const onDragStart = e => {
-    if (!e.target?.dataset?.componentId) {
+    const parent = e.target.closest("[data-type='component']")
+    const child = getDOMNodeForComponent(e.target)
+    if (!parent?.dataset?.id || !child) {
       return
     }
 
     // Update state
-    dragTarget = e.target.dataset.componentId
-    builderStore.actions.selectComponent(dragTarget)
+    dragInfo = {
+      target: parent.dataset.id,
+      parent: parent.dataset.parent,
+    }
+    builderStore.actions.selectComponent(dragInfo.target)
     builderStore.actions.setDragging(true)
 
     // Highlight being dragged by setting opacity
-    const child = getDOMNodeForComponent(e.target)
-    if (child) {
-      child.style.opacity = "0.5"
-    }
+    child.style.opacity = "0.5"
   }
 
   // Callback when drag stops (whether dropped or not)
   const onDragEnd = e => {
     // Reset opacity style
-    if (dragTarget) {
+    if (dragInfo) {
       const child = getDOMNodeForComponent(e.target)
       if (child) {
         child.style.opacity = ""
@@ -45,8 +45,7 @@
     }
 
     // Reset state and styles
-    dragTarget = null
-    dropTarget = null
+    dragInfo = null
     dropInfo = null
     builderStore.actions.setDragging(false)
   }
@@ -54,7 +53,7 @@
   // Callback when on top of a component
   const onDragOver = e => {
     // Skip if we aren't validly dragging currently
-    if (!dragTarget || !dropInfo) {
+    if (!dragInfo || !dropInfo) {
       return
     }
 
@@ -77,7 +76,7 @@
     // If not available to drop inside, just check whether we are closer
     // to the top or bottom
     if (!droppableInside) {
-      dropMode = nearestEdge
+      dropInfo.mode = nearestEdge
     }
 
     // Otherwise determine whether the user wants to drop inside or at
@@ -89,9 +88,9 @@
         Math.round(top + height - edgeLimit),
       ]
       if (mouseY >= insideLimit[0] && mouseY <= insideLimit[1]) {
-        dropMode = "inside"
+        dropInfo.mode = "inside"
       } else {
-        dropMode = nearestEdge
+        dropInfo.mode = nearestEdge
       }
     }
   }
@@ -99,7 +98,7 @@
   // Callback when entering a potential drop target
   const onDragEnter = e => {
     // Skip if we aren't validly dragging currently
-    if (!dragTarget) {
+    if (!dragInfo) {
       return
     }
 
@@ -107,7 +106,7 @@
     if (
       element &&
       element.dataset.droppable &&
-      element.dataset.id !== dragTarget
+      element.dataset.id !== dragInfo.target
     ) {
       // Ensure the dragging flag is always set.
       // There's a bit of a race condition between the app reinitialisation
@@ -117,20 +116,20 @@
       }
 
       // Store target ID
-      dropTarget = element.dataset.id
+      const target = element.dataset.id
 
       // Precompute and store some info to avoid recalculating everything in
       // dragOver
       const child = getDOMNodeForComponent(e.target)
       const bounds = child.getBoundingClientRect()
       dropInfo = {
+        target,
         name: element.dataset.name,
         droppableInside: element.dataset.droppableInside === "true",
         bounds,
       }
     } else {
       dropInfo = null
-      dropTarget = null
     }
   }
 
@@ -141,8 +140,12 @@
   // Callback when dropping a drag on top of some component
   const onDrop = e => {
     e.preventDefault()
-    if (dropTarget && dropMode) {
-      builderStore.actions.moveComponent(dragTarget, dropTarget, dropMode)
+    if (dropInfo) {
+      builderStore.actions.moveComponent(
+        dragInfo.target,
+        dropInfo.target,
+        dropInfo.mode
+      )
     }
   }
 
@@ -172,7 +175,7 @@
 </script>
 
 <IndicatorSet
-  componentId={dropMode === "inside" ? dropTarget : null}
+  componentId={dropInfo?.mode === "inside" ? dropInfo.target : null}
   color="var(--spectrum-global-color-static-green-500)"
   zIndex="930"
   transition
@@ -180,9 +183,7 @@
 />
 
 <DNDPositionIndicator
-  componentId={dropTarget}
   {dropInfo}
-  mode={dropMode}
   color="var(--spectrum-global-color-static-green-500)"
   zIndex="940"
   transition
diff --git a/packages/client/src/components/preview/DNDPositionIndicator.svelte b/packages/client/src/components/preview/DNDPositionIndicator.svelte
index 80539004c6..8565d42f9e 100644
--- a/packages/client/src/components/preview/DNDPositionIndicator.svelte
+++ b/packages/client/src/components/preview/DNDPositionIndicator.svelte
@@ -1,15 +1,13 @@
 <script>
   import Indicator from "./Indicator.svelte"
 
-  export let componentId
   export let dropInfo
-  export let mode
   export let zIndex
   export let color
   export let transition
 
-  $: dimensions = getDimensions(dropInfo?.bounds, mode)
-  $: prefix = mode === "above" ? "Above" : "Below"
+  $: dimensions = getDimensions(dropInfo?.bounds, dropInfo?.mode)
+  $: prefix = dropInfo?.mode === "above" ? "Above" : "Below"
   $: text = `${prefix} ${dropInfo?.name}`
 
   const getDimensions = (bounds, mode) => {
@@ -25,8 +23,8 @@
   }
 </script>
 
-{#key `${componentId}-${mode}`}
-  {#if dimensions && mode !== "inside"}
+{#key `${dropInfo?.target}-${dropInfo?.mode}`}
+  {#if dimensions && dropInfo?.mode !== "inside"}
     <Indicator
       left={dimensions.left}
       top={dimensions.top}