in bernoulli's equation at point 1 the pressure is positive (saying that is applied by the water), but at point 2 with the same condition pressure is negative (pressure is applied by the atmosphere......why is it so? At point 2 the pressure should also be positive....
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Without a drawing, it is impossible to answer your question.
Attach either a scan or a sketch of the situation.
The positive and the negative signs indicate whether the pressure is assisting the the movement of the fluid (i.e. either helping to change it P.E or K.E) . For eg while using a pump, the pump will apply positive pressure and increase the fluid's kinetic energy while at the other end the atmospheric pressure will oppose the movement of water and will be termed as negative pressure.In deriving the equation, at one end we force the water to move by applying the pressure ( the means are unimportant ) while the other end is left open to the atmosphere or any other situation. Obviousy the pressure will oppose the motion and the work done by it will be negative and you must have seen while deriving the eqn.