diff --git a/python/src/com/jetbrains/python/psi/PyUtil.java b/python/src/com/jetbrains/python/psi/PyUtil.java
index 14d60b6df926..c3f468c34dc4 100644
--- a/python/src/com/jetbrains/python/psi/PyUtil.java
+++ b/python/src/com/jetbrains/python/psi/PyUtil.java
@@ -61,7 +61,8 @@ import com.intellij.psi.stubs.StubElement;
 import com.intellij.psi.util.*;
 import com.intellij.ui.awt.RelativePoint;
 import com.intellij.util.*;
-import com.intellij.util.containers.ContainerUtil;
+import com.intellij.util.containers.*;
+import com.intellij.util.containers.HashSet;
 import com.jetbrains.NotNullPredicate;
 import com.jetbrains.python.PyBundle;
 import com.jetbrains.python.PyNames;
@@ -609,16 +610,18 @@ public class PyUtil {
   @NotNull
   public static PsiElement resolveToTheTop(@NotNull final PsiElement elementToResolve) {
     PsiElement currentElement = elementToResolve;
+    final Set<PsiElement> checkedElements = new HashSet<>(); // To prevent PY-20553
     while (true) {
       final PsiReference reference = currentElement.getReference();
       if (reference == null) {
         break;
       }
       final PsiElement resolve = reference.resolve();
-      if ((resolve == null) || resolve.equals(currentElement) || !inSameFile(resolve, currentElement)) {
+      if ((resolve == null) ||  checkedElements.contains(resolve) || resolve.equals(currentElement) || !inSameFile(resolve, currentElement)) {
         break;
       }
       currentElement = resolve;
+      checkedElements.add(resolve);
     }
     return currentElement;
   }
diff --git a/python/testData/inspections/PyAssignmentToLoopOrWithParameterInspection/good.py b/python/testData/inspections/PyAssignmentToLoopOrWithParameterInspection/good.py
index 2e52d144c8a7..9dfcdbc0166e 100644
--- a/python/testData/inspections/PyAssignmentToLoopOrWithParameterInspection/good.py
+++ b/python/testData/inspections/PyAssignmentToLoopOrWithParameterInspection/good.py
@@ -96,4 +96,19 @@ def contains_even_number(l):
         print elt
     else:
         for elt in range(10):
-            pass
\ No newline at end of file
+            pass
+
+def write_data():
+    lines = ''
+    line = ''
+    while True:
+        next_char = 'a'
+        line += next_char
+
+        if 100 > 999:
+            line = ''
+            last_ok = ''
+
+    if len(lines) <= 2:
+        for line in lines:
+            next_char += 'b'
\ No newline at end of file