When I picked up the position in the summer (between $23 and $27) I was looking at just above 30 as my target price. At a p/e of more than 20 against next years earnings, I'd be ready to sell.
Stock Traders Daily, Thomas Kee, sets out all the arguments to short MSFT. While I'm not ready to short MSFT unless I see both huge overvaluation (not yet the case) and downside momentum, his arguments for shorting present good reasons to be ready to sell.
MSFT 1-yr chart:
Disclosures and Confessions: I own Microsoft (MSFT) at what I consider a full position. I currently have outstanding limit orders to sell 30 strike call options with various expirations above the current market. I do not own an XBOX though I think it's the best of the game platforms I've seen. I have friends that work at Microsoft though I really don't talk to them about the company ever. I like that Bill Gates has made a huge committment to philanthropy at such a young age.