Alright so my first practice partner was a PR'd Luigi from my region, so I consider myself pretty knowledgeable concerning this match-up. Going to go over a few of Luigi's gimmicks in the match-up then cover different things you can do to cover everything.
One of the biggest issues with this match-up from Sheik's perspective is how if you land on stage around 70-80 with your up b you will die. Once the Luigi has the waveland up b down to a notch, it really limits some of the things you can do to mix up your recovery since the risk reward is so skewed.
Luigi really can't combo Sheik to death if Sheik uses the proper DI, but he can mix up his attacks to mess that up. Situation awareness and match-up experience go a long way in surviving Luigi's combos, so if I was you I would study the different moves and the different ways to DI them.
Luigi has a lot of different small nuances that make inexperienced players in the match-up struggle. His tech traps are pretty obvious once you get used to them, but when you aren't it is kind of hard to identify. Luigi's Down-B is a tech trap in one move, since it double hits before you hit the ground. Don't tech in response to the first hit, only the second. Luigi experiences a small amount of hit stun compared to the rest of the cast, and that will usually get you Neutral A'd or Down A'd at earlier percents when you try to follow up on tilts or dash attacks. You can usually wait for them to throw the nair if you know they will wiggle out of hit stun and nair, then respond to it. Another thing I see a lot of less experienced players get hit by in the match-up is double aerial. Its not safe, you wait for the second aerial if they do a high one on shield and can either shield grab if they space badly or wavedash oos and punish them.
Luigi has no legitimate ways to get down. He has to either dair or nair, and both you can wait out. You can bait an aerial as they fall with jump fall then double jump after their aerial. He falls slow and gets easily juggled so just keep him in the air and he should die.
Luigi's movement, while somewhat overwhelming, is usually pretty predictable if you really watch it. He has to stay grounded since his aerial movement is so poor, and if you keep moving around him he can only follow with wavedashes/wavelands around the stage which you can eventually punish.
Luigi has no legitimate ways to deal with needle camping. You can pretty easily gay your way through the match-up with needles if you feel like, and if not you can just force bad approaches out of them with needles.
Luigi's recovery is all very linear, and while it has a high vertical payoff, you always know where he will be. If he is far off stage throw needles at him and hit him out of his things. If he is in bair range wait for his side b and then jump off stage needle turnaround and bair him. As he gets close enough to grab ledge you have to grab ledge and sami stall. If he is able to get high enough to get back onto stage, drop down rising nair to get him. If he isn't, just resetting invincibility and rolling on when he has too up b will secure the kill. If he is near the stage he has two options for recovery(unless he has double jump, in which case you keep sami stalling and just react to what he does). Just realize he can only down b or up b with no double jump and the recovery gets simple. Luigi's side b has less end lag when it hits the stage, so just take note of that.
There is a bunch of smaller stuff he can do to try to mix you up like cross up grab with his long ass wavedash but honestly just being aware of every option Luigi has in the different situations kinda simplifies the match-up to you just waiting out his stuff and killing him.
