I am in need of a little help here, I need to identify the negative words like \"not good\",\"not bad\" and then identify the polarity (negative or positive) of the sentiment. I
It's been a while since I've worked on sentiment analysis, so not sure what the status of this area is now, and in any case I have never used nltk for this. So I wouldn't be able to point you to anything there. But in general, I think it's safe to say that this is an active area of research and an essential part of NLP. And that surely it isn't a problem that has been 'solved' yet. It's one of the finer, more interesting fields of NLP, involving irony, sarcams, scope (of negations). Often, coming up with a correct analysis means interpreting a lot of context/domain/discourse information. Which isn't straightforward at all. You may want to look at this topic: Can an algorithm detect sarcasm. And some googling will probably give you a lot more information.
In short; your question is way too broad to come up with a specific answer.
Also, I wonder what you mean with "I did everything except handling the negations". You mean you identified 'negative' words? Have you considered that this information can be conveyed in a lot more than the words not, no, etc? Consider for example "Your solution was not good" vs. "Your solution was suboptimal". What exactly you are looking for, and what will suffice in your situation, obivously depends on context and domain of application. This probably wasn't the answer you were hoping for, but I'd suggest you do a bit more research (as a lot of smart things have been done by smart people in this field).