diff --git a/platform/lang-impl/src/com/intellij/refactoring/move/moveFilesOrDirectories/MoveFilesOrDirectoriesHandler.java b/platform/lang-impl/src/com/intellij/refactoring/move/moveFilesOrDirectories/MoveFilesOrDirectoriesHandler.java
index c2d517c59766..2fa5189162fd 100644
--- a/platform/lang-impl/src/com/intellij/refactoring/move/moveFilesOrDirectories/MoveFilesOrDirectoriesHandler.java
+++ b/platform/lang-impl/src/com/intellij/refactoring/move/moveFilesOrDirectories/MoveFilesOrDirectoriesHandler.java
@@ -21,6 +21,8 @@ import com.intellij.openapi.actionSystem.LangDataKeys;
 import com.intellij.openapi.diagnostic.Logger;
 import com.intellij.openapi.editor.Editor;
 import com.intellij.openapi.project.Project;
+import com.intellij.openapi.roots.ProjectRootManager;
+import com.intellij.openapi.vfs.VirtualFile;
 import com.intellij.psi.*;
 import com.intellij.psi.util.PsiTreeUtil;
 import com.intellij.psi.util.PsiUtilCore;
@@ -61,7 +63,9 @@ public class MoveFilesOrDirectoriesHandler extends MoveHandlerDelegate {
 
   public static boolean isValidTarget(PsiElement psiElement) {
     if (!(psiElement instanceof PsiDirectory || psiElement instanceof PsiDirectoryContainer)) return false;
-    return psiElement.getManager().isInProject(psiElement) || ScratchFileService.isInScratchRoot(PsiUtilCore.getVirtualFile(psiElement));
+    if (psiElement.getManager().isInProject(psiElement)) return true;
+    VirtualFile virtualFile = PsiUtilCore.getVirtualFile(psiElement);
+    return ScratchFileService.isInScratchRoot(virtualFile) || virtualFile != null && ProjectRootManager.getInstance(psiElement.getProject()).getFileIndex().isExcluded(virtualFile);
   }
 
   public void doMove(final PsiElement[] elements, final PsiElement targetContainer) {