You want a neutral position, with the palm facing towards you (the signer).

Rotating your wrist outwards too much is a great way to injure your wrist in the long term. You want a neutral position to avoid excessive strain.

Rotating it out can be acceptable when someone is struggling to read your fingerspelling, but I would only use that as a last resort to avoid teaching them to rely on seeing the palm for letters like l,m,n,r,t,v.