I would suggest two things. Both of them, however, require that you give them printouts of the code so that they can make notations of their own without having to use any tool. Just write on the paper. Also, I'm assuming that your code is in small pieces, say, short methods. For me, a method is long at about five lines and a method that covers a page is incomprehensible. I have anecdotal evidence from industry that the latter is also true.
One method, assuming that you have given students the code is to just project it from your normal IDE and highlight it with the mouse. Ask the students about it and talk about it. Asking is probably more effective. You don't need to write anything.
Another uses a tool like Powerpoint. Build a deck in which each page shows exactly the same code but with different sections highlighted as you desire, using one or more colors. You can flip between pages as you talk, flipping both forward and backward as needed. But, again, ask the students to explain, rather than giving your own explanations. This way you can pick up misconceptions they might have and correct them. Make sure that the code itself has the same alignment on each page. Then when you flip, only the highlighting changes and students don't need to readjust the context.
Perhaps you can project against a writable surface rather than a screen. If you project on a whiteboard (and can ignore the glare) you can use marker pens to annotate - especially when the students say the right thing.
Make it interactive. Broadcast is much less effective.
Also, since you are putting effort in anyway, make sure that you always use intention revealing names in your demo code. Don't use x, y, z, i, j, k. Make the names come from the problem being solved, not the solution. For example counter is a name from the solution. But negative_value_counter is a name from the problem (of counting negative values - duh). In this way, if you are primarily teaching them about how to structure programs, you can focus on the structure (if, while, ...) rather than having them wonder about the purpose of abstract names.