Perfect shield

Bowser, Perfect Shielding a projectile.

Perfect Shielding is the official term when one activates a shield just as an incoming attack would have hit the receiving character. In order for the technique to be executed, one must rely on timing and skill. When the opponent is ready to strike, the player must quickly use the shield. If done correctly, the character takes no damage and may immediately perform a counterattack while the attacker is stuck in freeze frames. When used, any incoming attack is blocked with no damage done to a character's shield. The Perfect Shield technique in SSBB is comparable to a parry in traditional fighting games, as it results in little to no knockback and freezes the opponent for a couple frames.

Perfect Shielding is done by quickly and fully depressing a shield button two frames before an attack connects. If done correctly, there will be a significant flash on the shield and a distinctive "chlink" sound. Because it is technically a shield, it is ineffective against grabs.

CPU players, especially level 9s, use this technique a lot. Human players don't use it as much simply because of the reaction times and precision usually required. As such, it often comes as a surprise and can momentarily disrupt a match.

This technique can also reflect projectiles. However, in Brawl, it seems to do so rarely.

In Melee

In SSBM, the technique was known as Powershielding (named for the Powershielder bonus attained by using the technique multiple times). Powershielding was accomplished by fully pressing L or R such that the shield appears overlapping of the incoming attack. The noise heard by doing this is rather quiet compared to Brawl's, and the technique could reflect projectiles (which would only do half damage).

Something still not completely understood is how Yoshi's shield sometimes powershields attacks even when the shield is already up.

In Brawl

The ability to powershield returns in SSBB, working the same way as in melee. However, this time, a ping occurs when executed properly. Also, powershilding now rarely reflects projectiles. The Perfect Shield on the DOJO!!

A video that explains perfect shielding