Now, it's time to face off against Lunar! He has an array of moves; He can slide, or jump, leaving grenades behind, fire a machine gun, punch, and fire an energy blast. You can't block the machine gun, so just keep your distance with that, however, everything else can be countered.
If you catch a blast with good timinging, you can throw it back, and if he doesn't block it, he'll take damage. The same oes with grenades, but make sure to throw them from a distance, so you don't get hurt yourself.
If he punches, jump over him, and grab him from the back. Sometimes, you can throw him against the ground, to do some damage. Actually, you can grab him when he finishes any of his attacks, however, he sometimes won't take damage. Keep up the fight, and when you defeat him, you'll finish the level.
Wait for Lunar to shoot an energy blast from his gun, and catch it with B to cause a yellow gem to fall. Note: This doesn't appear to work, if you are moving the D-Pad in any direction; So press B, and only B. Yes it works.