Reprojecting GeoJSON in OpenLayers

After looking in the API docs at http://openlayers.org/en/v3.0.0/apidoc/ol.source.GeoJSON.html and unchecking the checkbox Stable Only on the top right of the banner, I see a projection option for the source.

It's here you have to set the projection to say to OpenLayers 3 to transform the data coordinates.

Trying changing your fiddle with below part, it works

var montanaSource = new ol.source.GeoJSON({
    object: ......................................,
    projection: 'EPSG:3857'
});