Final answer:
True, black holes are not observed directly but their presence is inferred from the effects on nearby stars and other phenomena such as X-ray emissions and gravitational waves.
Step-by-step explanation:
The statement that black holes cannot be observed directly and so their locations are identified by examining the motion of nearby stars is true. Black holes are detected indirectly by their gravitational effects on surrounding matter and their interaction with companion stars. When a star orbits something invisible with a mass greater than 3 solar masses, the likelihood is that it is a black hole, especially if there is X-ray emission indicative of an accretion disk. Furthermore, black holes contribute to the mass estimated by the gravitational effects on stars' orbits, further proof of their existence.
Gravitational wave astronomy has also contributed to our understanding of black holes. The collision of two black holes, for instance, produces ripples in spacetime detected by observatories such as LIGO and Virgo. Consequently, physics near a black hole reveals unique phenomena, such as intense tidal forces and the production of X-rays from material heating up as it accretes onto the black hole. Advances in technology, like the Chandra X-ray Observatory, provide further evidence of black holes through detailed observations of these high-energy processes occurring near them.