You’re looking for the handler that processes the touch moved and touch ended events.
While the movement occurs, the rubber band stretches using CCSprite.Scale. This gives the “impression” of pulling the band back, when it is just a scaling illusion. You could apply a smoother scaling during the touch movement instead of the rigid scaling done in Angry Ninjas.
You also set the rotation of the band to correspond with where the aiming occurs.
I hope that helps.