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<span>Indirect characterization uses a person/character's speech patterns or other forms of appearance to give a look into their personality. In this case, dialogue would be considered a way to indirectly characterize. Direct characterization, on the other hand, uses actual descriptive words and phrases to give a look at how a character will behave, look, or feel.</span>
Go back to the text and re-read a passage where Watson made a discovery. If Sherlock praises him, you've got your answer. I'm sorry if this wasn't much help, but I don't have any text to go off of.
Orpheus with his lute made trees,
And the mountain tops that freeze,
Bow themselves when he did sing:
To his music plants and flowers
Ever sprung; as sun and showers
There had made a lasting spring.
Every thing that heard him play,
Even the billows of the sea,
Hung their heads, and then lay by.
In sweet music is such art,
Killing care and grief of heart
Fall asleep, or hearing, die.
The woods decay, the woods decay and fall,
The vapours weep their burthen to the ground,
Man comes and tills the field and lies beneath,
And after many a summer dies the swan.
Me only cruel immortality
Consumes: I wither slowly in thine arms,
Here at the quiet limit of the world,
A white-hair’d shadow roaming like a dream
The ever-silent spaces of the East,
Far-folded mists, and gleaming halls of morn …