diff --git a/.github/workflows/versions.yml b/.github/workflows/versions.yml
index ce43847a..34da05a7 100644
--- a/.github/workflows/versions.yml
+++ b/.github/workflows/versions.yml
@@ -57,7 +57,7 @@ jobs:
       fail-fast: false
       matrix:
         os: [ubuntu-latest, windows-latest, macos-latest]
-        node-version: [17-nightly, 18-nightly, 19-nightly]
+        node-version: [16.0.0-nightly20210420a0261d231c, 17-nightly, 18.0.0-nightly]
     steps:
       - uses: actions/checkout@v3
       - name: Setup Node
diff --git a/__tests__/README.md b/__tests__/README.md
new file mode 100644
index 00000000..bbb4ac06
--- /dev/null
+++ b/__tests__/README.md
@@ -0,0 +1,10 @@
+Files located in data directory are used only for testing purposes. 
+
+
+## Here the list of files in the data directory
+ - `.nvmrc`, `.tools-versions` and `package.json` are used to test node-version-file logic
+ - `package-lock.json`, `pnpm-lock.yaml` and `yarn.lock` are used to test cache logic 
+ - `versions-manifest.json` is used for unit testing to check downloading Node.js versions from the node-versions repository.
+ - `node-dist-index.json` is used for unit testing to check downloading Node.js versions from the official site.
+ - `node-rc-index.json` is used for unit testing to check downloading Node.js rc versions from the official site.
+ - `node-nightly-index.json` is used for unit testing to check downloading Node.js nightly builds from the official site.
\ No newline at end of file
diff --git a/dist/setup/index.js b/dist/setup/index.js
index a39bcda2..c3e53647 100644
--- a/dist/setup/index.js
+++ b/dist/setup/index.js
@@ -73438,7 +73438,7 @@ function evaluateNightlyVersions(versions, versionSpec) {
         }
     }
     if (range) {
-        versions.sort((a, b) => +semver.lt(a, b) - 0.5);
+        versions.sort(semver.rcompare);
         for (const currentVersion of versions) {
             const satisfied = semver.satisfies(currentVersion.replace('-nightly', '-nightly.'), range, { includePrerelease: true }) && currentVersion.includes('nightly');
             if (satisfied) {
@@ -73462,12 +73462,7 @@ function evaluateVersions(versions, versionSpec) {
     if (versionSpec.includes('nightly')) {
         return evaluateNightlyVersions(versions, versionSpec);
     }
-    versions = versions.sort((a, b) => {
-        if (semver.gt(a, b)) {
-            return 1;
-        }
-        return -1;
-    });
+    versions = versions.sort(semver.rcompare);
     for (let i = versions.length - 1; i >= 0; i--) {
         const potential = versions[i];
         const satisfied = semver.satisfies(potential, versionSpec);
diff --git a/docs/advanced-usage.md b/docs/advanced-usage.md
index 287b130f..c2a8374e 100644
--- a/docs/advanced-usage.md
+++ b/docs/advanced-usage.md
@@ -106,7 +106,9 @@ jobs:
 
 ## Nightly versions
 
-You can specify a nightly version to download it from https://nodejs.org/download/nightly.
+You can specify a nightly version to download it from https://nodejs.org/download/nightly. 
+
+### Install nightly build for specific node version
 
 ```yaml
 jobs:
@@ -117,7 +119,39 @@ jobs:
       - uses: actions/checkout@v3
       - uses: actions/setup-node@v3
         with:
-          node-version: '16.0.0-nightly' # or 16-nightly
+          node-version: '16.0.0-nightly' # it will install the latest nigthly release for node 16.0.0
+      - run: npm ci
+      - run: npm test
+```
+
+### Install nightly build for major node version
+
+```yaml
+jobs:
+  build:
+    runs-on: ubuntu-latest
+    name: Node sample
+    steps:
+      - uses: actions/checkout@v3
+      - uses: actions/setup-node@v3
+        with:
+          node-version: '16-nightly' # it will install the latest nigthly release for node 16
+      - run: npm ci
+      - run: npm test
+```
+
+### Install the exact nightly version
+
+```yaml
+jobs:
+  build:
+    runs-on: ubuntu-latest
+    name: Node sample
+    steps:
+      - uses: actions/checkout@v3
+      - uses: actions/setup-node@v3
+        with:
+          node-version: '16.0.0-nightly20210420a0261d231c'
       - run: npm ci
       - run: npm test
 ```
@@ -140,6 +174,8 @@ jobs:
       - run: npm test
 ```
 
+**Note:** You should specify the exact version for rc: `16.0.0-rc.1`.
+
 ## Caching packages data
 The action follows [actions/cache](https://github.com/actions/cache/blob/main/examples.md#node---npm) guidelines, and caches global cache on the machine instead of `node_modules`, so cache can be reused between different Node.js versions.
 
diff --git a/src/installer.ts b/src/installer.ts
index 37bb7ce8..1b5659b6 100644
--- a/src/installer.ts
+++ b/src/installer.ts
@@ -370,7 +370,7 @@ function evaluateNightlyVersions(
   versionSpec: string
 ): string {
   let version = '';
-  let range: string | null | undefined;
+  let range: string | undefined;
   const [raw, prerelease] = versionSpec.split('-');
   const isValidVersion = semver.valid(raw);
   const rawVersion = isValidVersion ? raw : semver.coerce(raw);
@@ -383,7 +383,7 @@ function evaluateNightlyVersions(
   }
 
   if (range) {
-    versions.sort((a, b) => +semver.lt(a, b) - 0.5);
+    versions.sort(semver.rcompare);
     for (const currentVersion of versions) {
       const satisfied: boolean =
         semver.satisfies(
@@ -416,12 +416,7 @@ function evaluateVersions(versions: string[], versionSpec: string): string {
     return evaluateNightlyVersions(versions, versionSpec);
   }
 
-  versions = versions.sort((a, b) => {
-    if (semver.gt(a, b)) {
-      return 1;
-    }
-    return -1;
-  });
+  versions = versions.sort(semver.rcompare);
   for (let i = versions.length - 1; i >= 0; i--) {
     const potential: string = versions[i];
     const satisfied: boolean = semver.satisfies(potential, versionSpec);