I am not quite sure how you want to change the chart on click or drag or whether this change should be a result of click on another control (e.g. a button) or on the chart itself. That is why, in case the information provided below does not help you, please explain in detail your current setup and the result you are after.
In short, yes, you can update the chart control dynamically. Here are a few examples of dynamic chart updates:
And the following links demonstrate dynamic chart updates that are result of click/drag on the chart itself:
the Telerik team
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