Shell script running as a daemon?

[Mateus Interciso]

Hello, I'm planing on making a (hopefully) simple shell script that act 
as a daemon. This particular shell script should keep watching a folder, 
and wenever a new txt file(all files that arrive on that folder are txt) 
arrives, it should grep trough it, and take some actions.
My question is if it's possible to make this kind of daemon?
Any suggestions?Feebacks?

Thanks for your help.

Zarnick