diff --git a/jedi/api/project.py b/jedi/api/project.py
index 6ce05270..6c75cd79 100644
--- a/jedi/api/project.py
+++ b/jedi/api/project.py
@@ -110,16 +110,15 @@ class Project(object):
                 suffixed += discover_buildout_paths(inference_state, inference_state.script_path)
 
                 if add_parent_paths:
-                    # Collect directories in upward search until we:
-                    #   1. Hit any directory without an __init__.py, AND
-                    #   2. Are above self._path.
+                    # Collect directories in upward search by:
+                    #   1. Skipping directories with __init__.py
+                    #   2. Stopping immediately when above self._path
                     traversed = []
-                    no_init = False
                     for parent_path in traverse_parents(inference_state.script_path):
-                        if not os.path.isfile(os.path.join(parent_path, "__init__.py")):
-                            no_init = True
-                        if no_init and not parent_path.startswith(self._path):
+                        if not parent_path.startswith(self._path):
                             break
+                        if os.path.isfile(os.path.join(parent_path, "__init__.py")):
+                            continue
                         traversed.append(parent_path)
 
                     # AFAIK some libraries have imports like `foo.foo.bar`, which